WHY IT IS EASIER TO SELL AT A HIGHER PRICE THAN LOWER PRICE.
WHY HIGH PRICE IS EASY TO GET THAN LOW PRICE.
Can You Deliver What You Say You Can?
Before I go on with this post, I want to make clear this will only apply if the product or service is genuine and can do what it says on the tin without the B.S.
That said, let me explain why it is much easier to sell at a higher price than lower price. If you take a closer look at most low end of the products or services that can be scaled up into a major business then there is a very good chance they are already dominated by the Blue Chip companies and if you find you can do something cheaper than them then I an willing to bet you that someone somewhere will come along and do it cheaper than you sooner or later. To be the cheapest is not something to brag out or to be proud about in business.
Less Competition At The Top
But if you look at the top end of the food chain in your industry, you will find very few people competing, so who would you rather be competing with 1,000’s or 12 businesses?
The real question you have to ask yourself is, can I create more value than and do a much better job than the 12 or so players who have probably been in that sector and most likely dominate that industry at the top of the food chain.
Do You Have The Confidence In Yourself To Charge More?
Fear and confidence is the key to those who always end up serving at the bottom of the food chain and competing on price and end up becoming a commodity. Nothing wrong with that, take look at the £ or $ shops that are thriving, if that is what you want.
Stop and think, where would you rather be serving and who as to where you are serving the customers / clients you are currently serving.
Case Study Of Dog Food Company
A few years back I worked with a online Dog Food seller, he had just over £3 million in sales but net profits were just over £136,000 which is very poor in my opinion. Because he was trying to be everything to everyone, his inventory was so high he was taking loans out plus storage and paying a small fortune to Google for his traffic to continue selling his Dog Food.
After working with this company we knocked the range of dog foods from 30 plus to 6 range of dogs only. Took about 7 months to re-position his brand and his offerings as a SPECIALIST Dog Food provider and we tripled his prices for the same products and made them more appealing.
12 months down the road after the launch of the new and higher end sales came down to £1.63 million from £3.2 millions and profits went up from £136,000 to £413,000 in 12 months.
Not Trying To Impress You But To Impress Upon You The Importance Of Price.
Look I am not trying to impress you but just making a point about fishing at the lower end of the market or at the top end of the market. the choice is yours but do you have the confidence and the balls to move up market to compete with a small hand full of competitors on Value rather than price?
Value You Create Is Very Important
It is very important that the value you create with your product or service must be greater than the price you are asking. How do you define value for your product or service is down to you understand your customers and your product or service and being able to demonstrate that.
By the way my client got brought out by one of his suppliers 3 years later for far more than he had ever dreamed possible and he still works for the new owners on a retainer and all because he was prepared to listen and move up market.
Choice is yours and only you can decide if you want to stay where you are or move up market.