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Priced to Sell: Perfecting the Art of the Price Tag

By: Brittany Engelmann-- 2016-09-23 7:00 am --

Have you ever wondered what impact pricing has on sales? Studies show that pricing actually plays a significant role in the number of products you sell, but not always for the reasons you think. Many small businesses think that lower prices will incentivize sales, but this isn’t always the case. Here is the complete guide to pricing, so you can price every product to sell at maximum capacity. 

Pricing Is a Marketing Tactic

Pricing is about a lot more than profit margins. Pricing is a marketing tactic in and of itself. When products are priced in a way that optimizes consumer spending, it results in increased sales and better ROI. As with any marketing tactic, the key to success is to get into the minds of your customers by examining customer data. For pricing, this process is simple. You can test various price models alongside one another to see which type of pricing fares best among customers.

Value Is Greater Than Cost

So often, when businesses notice their sales slowing down, their first compulsion is to lower their prices. However, this isn’t your wisest mood. In fact, customers are often willing to pay more for an item they deem to provide greater value. If sales are struggling, rather than slashing pricing, consider emphasizing the value of your products. Create careful marketing campaigns that highlight why your products are the best, how they’ll improve the life of the buyer, and what specific problem they’ll solve. If customers view the item as offering high value, they’ll be more likely to purchase it, no matter what the price tag says.

The 99 Cents Rule

It’s commonplace nowadays for stores to mark items as 99 cents instead of one dollar or as $2.99 instead of an even $3. This isn’t simply to create pocketsful of change for consumers. Pricing something in such a way manipulates consumers into buying more. Many shoppers are hurried and don’t pay careful attention to the products they’re buying. As such, when they see something costing $2.99 as opposed to $3, the number two is what stands out in their mind, making them more likely to buy an item that’s only a penny less.

They Say Time Is Money: Sell Time and Make Money

Studies indicate that consumers are more attracted to time than money. So if you want to win their hearts, you have to sell them time. When selling an educational software, slogans like “400 hours of training included,” are effective. If selling a bicycle, an extended warranty is highly attractive to consumers. Consumers often view value quantitatively. They want to know exactly how long a product will last them before determining whether it’s worth the money.

Pricing is an art form in and of itself, and the sheer act of pricing your products will largely determine the number of sales you generate. A great pricing model relies on great wholesale suppliers, as keeping business costs low enables you to provide fair pricing to your own customers. At DollarDays, we understand the importance of the supplier-business relationship. We are committed to providing great merchandise at exceptional prices, so our business partners can thrive. Contact us today to learn more.