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PRICING “TIP OF THE WEEK”…
Cost-Plus Pricing Strategy – 2 Good Uses
Cost-plus pricing (adding a fixed percentage for profit on top of your costs) is the worst pricing strategy around. And it’s used by most companies(!) But… there are two good uses for it: Use it when all your products or services are completely customized. Thus if you build new houses to customer specs — thenContinue reading “Cost-Plus Pricing Strategy – 2 Good Uses”
Do you use this terrible pricing strategy?
Cost-plus pricing is where you calculate your costs, then add a percentage to it for profits. It is used by most companies. Cost-plus pricing is required only where you sell customized products/services — where every order is different. For all other products/services — it’s the worst pricing strategy you can use. In fact — youContinue reading “Do you use this terrible pricing strategy?”
Using Excess Production Capacity
If you have excess production capacity for your premium brand product, consider a lower cost version as well. However, make it a separate brand (or manufacture it for a private-label client) instead of cheapening your premium-brand image. Source: The Tao of Pricing.