Every time you are pricing goods, profit is the one thing that lingers your mind. However, the best you can do for your micro-business is to not only set prices that will ensure profitability but ones that are market competitive. So if you’ve been feeling like you aren’t earning what you’re worth or making adequate revenue, then increasing prices is one way to solve it.
On the other hand, keep in mind the present price as well as any future cost increases that may occur in a year, or two. A wrong way to go about it is to up your price without considering the future only to realize 6 months later that you need to increase it once more due to changes in the marketplace; it will automatically tick off your consumers.
No wonder it’s wise to know what the final goal is before you raise prices. The aim may not necessarily be to obtain new buyers or increase your sales. Beware, some shoppers won’t afford your new higher prices, but that’s no problem. One Raising prices will help you realize the importance of quality over quantity.
What’s more, you can also offer things like product/service improvements, or add a new service option to compensate the higher prices.
When you’re set to raise the cost of an item, always remember that timing is of the essence. Conduct an in-store study to see if merchants are contented with whatever merchandise or service you are trading before you ask them to pay a bit more. Furthermore, there are business models that don’t allow a sudden increase and will require you to boost up your prices on a regular basis. Depending on several factors, these increments may be done at the start of the year or after a specified span.
Making a decision on when to raise product or service prices is relatively easy; the hard part is communicating the cost increase to your loyal buyers or clients. So if you wish to break the news to your customers without breaking their hearts, then a perfect way to prepare them is by bringing to light the ROI and value of your product or service. In other words, you are simply trying to make the shopper understand the reason for the abrupt raise; and trying to explain that you are not merely doing it to rip them off.
Sometimes potential buyers are cunning and may attempt a negotiation or question the new cost. For such scenarios, you should remain confident and be sure to have given early warnings. The message should be simple and clear. While the customer deserves an explanation for the increase, you must apologize for it; but never blame it on inflation.
Sometimes you don’t need a small business cash advance bad credit to better the situation of your company, a reasonable increase in prices may be the best solution for you.