You are in business to make money. You make money by making profit - simple and short.
So your job as a business owner is to find ways of selling at a price that is higher than your cost so that you make profit.
A business owner would add Markup to Cost to get the Selling Price of an item.
But what if after arriving at the perfect Selling Price, sales aren't doing great - Are there any strategies that can be used?
Yes, there are over 20 various pricing strategies that bring in loads of profits to a business.
Let's discuss just two of them.
1. ANCHOR PRICING
A pricing strategy that makes an item seem cheaper by placing an older more expensive price of the same item.
Example 1
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Notice that the dress reads $300 was $600. The customer feels like he is getting a huge discount without knowing whether or not that dress was ever sold for $600.
Example 2
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Notice that the business owner put you under pressure of thinking if you don't buy now, that they might change their mind.
Example 3
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Here again, the same shoe at $150 but nobody buys it. But with the anchor strategy, everyone wants to buy even at higher price.
2. DECOY STRATEGY
A pricing strategy where a seller creates a bigger version of a product and fixes a price which makes it look more economical to buy the bigger one.
Example 1
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Example 2
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These Examples show that customers prefer bigger option than Small.
Example 3
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Do you see how these 2 simple strategies can make customers buy more from you?
From Pricing Strategies series 1, 2 and 3, Do you see that you can use pricing strategies to blow up your profits?
Comment below if you have learnt something.