How to Price a Product to Make a Profit

If you own a small business, then you can understand how frustration a pricing strategy can get. It appears as though all of your customers are just bouncing from business to business, fishing for the lowest price over everything else. However, if you join in on this race to the bottom, your profits will suffer more than you can imagine. Read on to find out how you can price a product to make a really large profit. Here are 5 steps that you can take to really turn your product pricing strategy around and make your business more profitable than it ever was before: Step 1 - Stop racing your competition to the bottom of bankruptcy. In the history of business, discounters have never lasted very long, because there will always be someone that can do it cheaper and faster than you can. Step 2 - Stop paying so much attention to your competition. Instead focus on providing a huge amount of value for your customers that goes way beyond the price of the item that you are selling. Step 3 - Raise your prices. Someone has to be the most expensive, right? Why not you? Of course you have to use the value in order to justify the increase in prices. People do not pay high prices for fun, they pay high prices for what they get in return (status, high value, scarcity, excellent customer service 24hrs a day, etc.) Step 4 - Use emotional-based selling. never focus on the price. Focus on the customer and what they are feeling. If you can engage the customer's emotions when they are making a purchase decision, you can pull down the skeptical barriers to the sale. Remember that people buy on emotion and later rationalise the sale with logic. Step 5 - Never focus on price buyers. These are your WORST customers. The price buyer only represents about 20% (unless you are in the business of deep-discounts). Focus on the other 80% of your customers instead. These are the people that are more worried about the buying EXPERIENCE than the price. They are also concerned with value, quality, customer service, rewards perks, and many other things that keep them coming back. None of these are related to price. Of course you cannot charge absolutely any price that you wish. Your market will have to justify if the price is acceptable, but by adding a huge pile of value and selling with emotions, you can make a lot more profit than the next person in the same industry. Joshua Black is the developer of the Ultimate Pricing Report, a whole new approach to price strategy for your small business. Download the report here: http://www.product-pricing-strategy.com Article Source: http://EzineArticles.com/?expert=Joshua_Black