In general I feel that there are 2 types of business’ modis operandi. Either be the lowest cost and hope for high volume, or offer your product at a higher price and educate the consumer on the reasons why your product is a higher price and allow the perceived value of the product to be high. Depending on your industry, either is appropriate, but neither can hurt from educating your customer!
One thing to consider while establishing your pricing structure is the economy and your competition. Are you in an area where the consumers are needing your service but the economy is struggling? Or are you in a want based, vs. need based, industry where you (and your competition) are offering this service, or good, as your main source of income? If so, consider what harm might happen to yourself, or the local economy in the long run, if you lower your prices to gather quick interest. Will consumers still be willing to purchase from you if you need to raise the price later? Will you be forcing your competition to close their doors, or worse yet, prevent a startup from enter your industry, because of your low pricing?
While everyone wants to be the best, please remember that competition is good for business. It keeps you evolving, ensures that you are offering the best possible for your consumer and it helps the local economy. But keep competition friendly, know your competitors, see how they are doing as people every once in a while. Be nice to each other and employ good sportsmanship rules. Just because you compete doesn’t mean you have to hate each other!
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