OnDemand WTP Pricing Research

4 pricing errors that will break your business | Inside Retail

Retail pricing can make or break your business. Coming up with RRP is 50 per cent science and 50 per cent art. The following symptoms and common strategies is evidence of poor pricing practices:

Pricepoint proliferation

This happens usually in multi-category stores. Stand in front of any merchandise category, say, the pen department in a newsagent, and observe how many pricepoints there are. Often you find six to eight pricepoints ranging from below $1 to $10.

Can a customer really tell the difference between a $2.95 pen and $3.95 pen? If not, why are you selling pens at $2.95?

Rationalising pricepoints makes buying a pen a more pleasant experience, and if managed correctly, will improve your margins.

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4 pricing errors that will break your business.