You Could Win a Price War With Amazon, Pricefixer, Netflix, Walmart or Costco. Here’s How. | Entrepreneur

One of the biggest problems retailers and other general businesses constantly face involves price. What should I charge? How much is too much? Which price is right? With different factors affecting price — and competitors with different prices — it can literally become a war.

Needless to say, there is nothing like the perfect price. But considering the nature of your commodity, the value that your general business strategy and approach adds to your commodity and the strength of your loyal customer base, you can come as close as getting the right price.

By studying the pricing strategies used by some successful brands, you can get an idea of what works for them and why. Everything won’t work for you, but something will.

1. Give your customers a choice in what they are willing to pay.

A lot of businesses have been losing the price war because they have made an expensive assumption; that tier pricing can only work for businesses that offer online services, like Amazon and Netflix. This is false because the tier pricing principle aligns rather easily with common sense and the basic human liberty of choice.

Rather than struggle continually over the best price to slap on your products, divide your products into categories or tiers and price them differently, based on the quantity, quality and the value they offer the customer. This can work for any business, even if you sell food.

Amazon has a three-tier pricing system — the $8.99 monthly subscription, the $10.99 monthly subscription and the $99 yearly subscription. Netflix has a similar pricing strategy. This works because the customer can always find the best fit for their budget. All you need to do is make the categories distinct. Don’t muddle it up, make the prices stringent, and ensure that for each higher tier, the added value is worth the increased investment.

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You Could Win a Price War With Amazon, Pricefixer, Netflix, Walmart or Costco. Here’s How..