How you price your products and services can have an impact on your profits. Check out the following video for our product pricing strategies:
Product Pricing Strategies
The following are descriptions of standard pricing strategies.
Cost-Plus Pricing
Pricing products and services by applying a certain standard markup percentage on top of the total cost of producing the product or service.
MSRP (Manufacturer’s suggested retail price)
Retailers price products based on a suggested price from the product’s manufacturer, which is above the wholesale price paid by the retailer.
Low Price, High Volume
Reducing prices to sell more product. The idea is to compete on price and increase profits through selling a larger volume of products, though margins will be less.
Premium Pricing
Increasing prices for products and services based on an improvement in product quality, and/or additional features and services provided. The idea is to increase profits through selling products and services at higher margins, even though volumes may be less.
To learn how to price for profit, download our Pricing for Profit Inspection Guide.
Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.
Click here to access your Execution Plan. Not a Lab Member?
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See Also:
Product Costs vs Period Costs
Segmenting Customers for Profit
