I don’t recall any time in the past 18 years where price has been such a driving issue for retail. Is it the economy? Is it the Internet? Is it the smart-phone barcode apps?
For whatever reason, all most retailers seem to be thinking about is where to set the price. How low do you go?
The easy answer is to set the price at what the customer perceives the product to be worth. Figure out what the average person would expect to pay and charge that amount. You’ll sell tons!
What about profit, you ask?
Well, for that, you’ll probably need to raise your prices.
Simple… Raise the Perceived Worth of the item in the mind of the customers. You do that three ways:
- Merchandise the product more effectively. Give it a special place on the shelf. Put a table cloth under it and a spotlight over it. Build a display that tells a story about the product. All of these things make the product appear more valuable to a customer.
- Make a sign for it. Put on the sign the story behind the product, the benefits of buying/using that product. Signs sell.
- Teach your staff everything on the sign and then some. Make sure they know what problems the product will solve so they can match customer to the product.
Quit worrying about price and instead focus on raising the customers’ perceptions and expectations. You’ll sell more and make more at the same time. Oh yeah, and you’ll have more fun doing it!
PS For more on Pricing for Profit, download the FREE eBook.