Setting the right prices for your products

This is a balancing act. A low price isn’t always ideal, as the product might see a healthy stream of sales without turning any profit. Similarly, when a product has a high price, a retailer may see fewer sales and “price out” more budget-conscious customers, losing market positioning.

Ultimately, every small business will have to do its homework. Retailers have to consider factors like cost of production, consumer trends, revenue goals, and competitor pricing. Even then, setting a price for a product isn’t just pure math (numbers behave in a logical way; humans, not so much).

• Price skimming: It refers to when an e-commerce business charges the highest initial price that customers will pay, then lowers it over time.
• Penetration pricing and discount pricing: It’s no secret that shoppers love sales, coupons, rebates, seaso...