Cost-plus pricing is a common approach to pricing used by many B2B businesses. It's simple really - in order to reach your cost-plus price you figure out all the costs of production or manufacture, set a desired margin for each unit and add that margin onto your cost. Hey presto, you have your price!
You already realise just how important pricing is to your business success – but it's still easy to fall into a trap and just plodding along aimlessley with the same old, same old prices. Don't you know that this could be costing you real money, it could be the difference between success and failure? Have you woken up and smelt the price of the coffee yet?
Topics: Pricing Strategy
Topics: Price Engine
Pricing is the reflection of everything you do as a business, from your product development all the way down to a link to your website. Nothing else defines your business and its products more.
Determining price is one of the toughest things to do in business, largely because it has such a big impact on your company’s bottom line. One of the critical elements of pricing is understanding what economists call price elasticity.
Topics: Price Elasticity
Do you have a conflict in your business between the pricing team and sales department? Certain members of your sales team probably think that all your pricing manager cares about is higher prices – which can make it more difficult for some in sales to close deals.
Are you still using spreadsheets to manage your prices? If that's the case, the future profitability of your business could be in jeopardy because relying on this method for all your pricing requirements has definitely had its day
Typically - if you are offering a product that provides more value than the competing alternative, customers will choose your offering. If your offer provides less value than its competing alternative, customers look elsewhere.
What to Consider?
Need to change your pricing strategy? That's a pretty big deal and a decision not to be taken lightly. The best way to avoid having a heart attack whilst you ponder this knotty issue is to break down (not literally) all the things you need to consider into smaller "compartments" and resolve each issue separately before you come to a final decision on your optimum pricing strategy and how you are going to achieve it.