If it’s expensive, it must be good
How do you price product? Are you more of a traditionalist, ending prices with numbers like ‘5,’ ‘7,’ or ‘9.’ From what I’ve observed, there is a movement to price products ending with ‘.00’ or showing it simply as the whole number. For instance, $19.99 is rounded up to $20. For products that end in $6 or $8, or put another way, $56 or $58, consider raising them to the next $10. So that’s $60 in both cases. Studies show people like to think in fives. As such, when an item costs more than $100, look to increase the price to the next $25. In other words, consider raising the price of a $100 item to $125.
Let’s continue with this idea that retail is a numbers game; I recommend testing a few different pricing strategies, especially when putting a product in your showcase for the first time. Here are two to consider:
Add a few dollars to every product you carry. This can really make a difference, particularly when it comes to your best-selling items. If you can’t change certain product pricing because it needs to be competitive, test this idea with the more exclusive products you sell.
Perceived value pricing. This strategy starts the moment you place an order with a supplier. Ask yourself at what price you could sell a particular item. Think outside the very controlling strategy of keystone pricing, and for that matter, the manufacturer’s suggested retail price. You are best at knowing your market, which includes your customers and their tolerance for pricing. You also know what your competition carries and at what price they sell their products.
