Have you ever watched “The Price is Right”? Contestants have a go at guessing the price of an artifact and the closest one wins the artifact. So how is the price set in the first place?
Every new or growing business faces hurdles while pricing new products or services – some more than others. How do you draw the line between pricing high to make quick profits but risk losing traction, and pricing attractively low but end up with minimal margins making it eventually not worthwhile? Where is that perfect pricing balance for your business?
An HBR study concluded that a 1% hike in price can yield up to 11% boost in profits, while a 1% sales volume change affects the bottom line by only 3.3%. Pricing, along with the product, its placement and promotion, plays a profound role in the success of your business.
“The Right Price” Strategy
You must have a solid pricing strategy, regardless if you are selling 3 products or 3000. Various pricing strategies are out there to complement your vision and product. Choose one, a few, or a combination of all to bring out the best results. If your product is perceived as high quality, it deserves a premium price tag. If you are looking to enter a stable market, consider early-bird discounts for penetrating the thicket. If you have complementary services to your product, you might benefit from bundling. Depending on your unique situation, you may have the luxury of experimenting with a few options before settling on your perfect fit. Getting the pricing strategy right goes a long way towards achieving your goals.
Varying vs Static Pricing
You can change the prices of some products during seasonal highs and lows. Take the classic example of hotels. A lot of research goes into the seasonal pricing of the hotel rooms. If you have full control over the costs of your product, you have more flexibility to tinker with the pricing model over demand highs and lows. If your business supplies lobsters to restaurants, your profits would be best served with managing your seasonal pricing effectively. You may want to offer that special loyal customer a preferred price or offer a discount on bulk orders. If you notice a regular pattern of orders, offer a recurring subscription and price it accordingly.
Today, technology is there to help you with every business process and simplify decision making. Whether you want to price your products based on seasonal trends, have promotional offers, have customer-specific pricing, or offer bulk-order discounts; the right tools can assist you. Kloudville’s Business 360 apps help you price your products and simplify the process of doing so. The tools available let you showcase your products in multiple currencies, price them based on customer types and seasons, set quantity-based discounts, and much more.
Within the global supply chain, every leg up helps – you need and should avail all the avenues to present your business as a platform for growth and success. Kloudville Commerce 360 is designed to help you surpass your competition – The right tools at your fingertips.