Any business will have to consider raising their prices eventually. There are many factors that create the need for raising prices. These are factors like inflation, costs associated with selling goods, price hikes in raw materials, shortages, and many more. Overhead costs in running a business never stay the same and rarely go down. Just this fact predicts that someday you will need to consider raising prices. But how should you go about this in order to not drive away your current customers and still keep a steady inflow of new customers? The simple answer is that you should go about raising prices carefully. Besides raising prices to cover increased overhead costs, here are some other considerations to make when doing this.
When your competitors are offering a product the same as yours but raising their prices then it might be time for an increase.
This is usually the case when you are selling a commodity where there are not many substitutes. In other words, the commodity is the same no matter where you buy it. The most prominent example of a commodity is gasoline. There isn’t much differentiation with gasoline other than additives and mixtures but gasoline is basically gasoline. If one station has to raise its prices, the others usually follow suit.
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