We all need to make a living and we want to get paid a fair and lucrative price for the products or services we offer in our home businesses—but sometimes we might be charging too much or the economy may shift and what we are offering is simply too expensive for our market. While lowering prices may be painful and obvious, there are some pitfalls that go along with dropping prices that should also be avoided.
Your prices should match the market you are selling too, as well as be comparable to your competitors and provide a reasonable value. They should also be enough to cover your expenses. This is where pricing can get complicated. If your costs of doing business go up, you can either pass the cost directly on to your customers or clients by raising the prices, or you can look for other ways to recoup your added expenses. Sometimes raising your prices can make your offering too expensive for the market or compared to your competitors.
Consider adding value to what you offer without adding expense if you are going to raise prices. If your prices are already too high, can you offer periodic discounts instead of lowering the price altogether? Are there ways you can add value to your product or service instead of lowering the price? For example, perhaps you could offer a money-back guarantee or a free trial period instead of lowering your prices. Chances are, the majority of individuals will not take you up on your refund, but it will give the product or service more value. Offering a volume discount can be another way to adjust your prices and reward your most loyal customers without cutting prices overall. If a customer or client orders multiple items or is with you for a certain amount of time, you can offer a “reward” in the form of a discount that can lower the price.
Of course, there may be times when you simply have to lower your prices, but consider trying other techniques first.