How Low Should You Go – Healthy Margins

Posted in Business Tips, Our Blog, Profitability

Maintaining a healthy margin is essential in order for a company to survive and continue to grow. Appropriate pricing and monitoring costs are key components to establishing and maintaining a strong margin.

Here are some key points on determining how low you should go with pricing your product/service.


Points to remember to maintain healthy margins:


  • Have the most up to date information regarding costs – this is the basis for determining your selling price.
  • Ensure volume does not decline as this will increase the overall overhead cost per unit and so decrease the margin
  • Have an in depth knowledge of the market the products/services are being sold to, to try and maximise the products/services price
  • Differentiate your product/service when compared to competitors – this will allow you to ensure that the maximum price can be placed on the product/service as the customer will not be able to find it anywhere else
  • With increased advertising now on the world wide web, competitors’ prices are now readily available – monitor this regularly to ensure that you are not losing customers due to excessive margin demands
  • Let customers know the high quality of the product/service to ensure that they know the price is justified

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