31 Lunch and learn: Pricing for wimps, discount disasters and other pricing conundrums

Written by Julia Bickerstaff // May 14, 2012 // Daily Juice // No comments

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Pricing can be a source of great anguish. And as with other things that cause us anxiety, some of us choose to deal with the issue by ignoring it!

We shouldn’t though because, shhhhh, it’s a well kept secret though that good pricing is one of the most effective paths to a profitable business.

Did you know that if a business raises its prices by just 1 percent, its profits (your income!) increase by an average of 11 percent? That’s a very healthy increase in profit for astonishingly little effort. What’s more, the same research shows that raising prices has a greater impact on profit than increasing your sales volume. Yep – compared to that 11 percent increase in profit from raising your prices by 1 percent, increasing your sales volume by 1 percent results in only a 5 percent increase in profit.

Ok, so that’s the ‘average’ business. Does it apply to you? Yes. Maybe not in exactly the same percentage, but an increase in price beats an increase in volume every time. Every time.

Because pricing is tricky but so important, I thought I’d use todays ‘Lunch and learn” to share four pricing articles I’ve written on the subject recently. Two are from a series called “Pricing for Wimps” that I’m doing for Flying Solo, and two are blog posts previously published in the “Scrapbook” blog.

Here they are:

Pricing for wimps: Getting started

Pricing for wimps: Your minimum hourly rate

Pricing hand made stuff: Why it pays to be picky about your customers

Why discounts don’t work

Enjoy!

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