Well, you decided to go for it, you are going to start your own business and get in on the economic expansion period which lies ahead. Indeed, I’d like to congratulate you on your excellent timing as this is the best time to start a business after the recession has ended, and ride the growth period which awaits.
Now then, during a recession many small businesses go for a “low-cost, high-volume strategy,” however, if you are just starting out you don’t want to price yourself too low because your customers will get used to the lower prices and you can never raise them again, even when the economy starts really kicking into gear.
Also, you must always realize there is a price at which no one will buy, and there is a price at which everyone will buy, but generally speaking, you can’t make money at that price. Therefore, the pricing of the products that you sell is paramount to your success and profits. To help you better understand this, I’d like to recommend a very good book to you, one that I have in my business library, and one that I believe every small business retailer should read. The name of the book is;
“Merchandise Pricing,” by The Small Business Management Development Program of the Small Business Administration or SBA; Government printing office Pueblo Colorado, 1970.
Why do I like this book so much even though it is nearly 40 years old, it’s simple, it’s one of the first books I’ve ever read on merchandise pricing, and fundamentally all of the information and advice is completely sound even today. That’s because consumer buying behavior hasn’t really changed all that much. In fact, I picked this book up the other day and paged through it again, and I realized how applicable this information is to people who sell their wares on the Internet.
That’s rather interesting considering that the Internet did not exist when the book was first published, and yet a small business person who sells through an e-commerce website could use the same pricing strategies. The book is brilliant, and I highly recommend it. Please consider all this.
By: Lance Winslow