Don't Get Greedy

While maintaining adequate levels of gross profit is important to a healthy bottom line, some businesses insist on charging high prices that are either not justified or too far out of line with their competition. Some businesses have the mistaken impression that their products/services are so much superior to their competitors' that they can command significantly higher prices. While in some cases a higher price can be justified, there is a definite threshold for pricing with most products/services. In fact, what some businesses consider high value products or services, many customers or prospective customers consider a commodity. In other cases where a product or service does indeed enjoy some sort of competitive advantage, the business attempts to squeeze an inordinate amount out of the customer by pricing at extremely high levels. Know your market, your customers and be objective about your products/services and price accordingly. When customers do not equate price with value received, your business is setting itself up for trouble.