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PUT YOUR PRICES UP OR DOWN?
As an example, let us assume your current business is as
follows:
| Sales: 100 widgets
sold at £100 each |
10,000 |
| Cost of Sales:
100 widgets cost £70 each |
7,000 |
| Gross Profit (30%) |
3,000 |
| Fixed Overheads |
2,500 |
| Net Profit |
500 |
Now if you were given two options
which one do you think would be most beneficial?
Option 1
Put your prices up by 10% in which case you are likely
to sell less quantity and let us say your best judgement is that the quantity
you sell will fall by 20%.
Option 2
Put your prices down by 10% in which case you are likely
to sell more quantity and let us say your best judgement is that the quantity
you sell will rise by 20%.
So do you raise prices by 10% and
lose 20% of your sales or reduce prices by 10% and get 20% more sales.
Which would you do?
Click
here for the answer
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