MAY 2025 Edition

The Price Is Right!  

There are many factors that go into pricing products and services.  As a startup or small business owner, one of your goals it to figure out the right price - the one that your customers are willing to pay and that will earn profits. There are many pricing strategies to choose from.  Below are a few to explore:         

 Bundling:

• Used to sell multiple products at a lower rate than selling them individually.

• A great technique for reducing inventory or phasing out products.  

Cost-Plus Pricing:

• Used to sell products purchased at wholesale with an added markup value based on costs.

• A very common technique and easy to implement.    

 Penetration Pricing:

• Used to introduce a new product at a price below the competition for brand awareness.

• Generates high sales volumes but breaking even or earning profits may take time.  

 Premium Pricing:

• Works best for selling unique, high-quality products or services at a premium price.

• Although profit margins can be high, sales volume may be low due to a small customer base.        

Pricing is not a “set it and forget it” activity.  Monitor and adjust prices continually to keep pace with market changes, competitors, and customer demands.  Stick with the strategy that works best for you!     

What other “Twig Bits” do you want to learn more about for your small business?