Five things to consider before raising prices

1. Timing - like everyone else? 

The fact that most of the service providers are raising prices around January and February is no news. Just when food and gasoline prices rise, and they ask for more money for gas and so on. It is not a surprise that operating a web store (including stocking, logistics, brand price raises) becomes more expensive too. The question is, can you also raise your prices when the customers have to consider more expenses already?

The answer is definitely yes! It is good to announce the changes in advance, not to shock the customers. The point is to communicate properly! If it is not a must for your company to make changes at the same time as your competition, add a few months to the mandatory price change at the beginning of the year. This might be a good strategy, your customers will thank you for it!

2. All or just a few? 

Should you raise prices on all your product portfolio? If you are not sure then you should choose a software solution that supports your decisions. PriceKit shows you which products’ prices should be changed, and how can you maximize your profit. If you work with already low prices, it is obvious that you need to change them. 

There are counterexamples too. Because of the curfews, the customers are gathering in the online space so loads of traders raised their prices on their webshops. This could work for a while, but today’s pandemic situation is very much different from the one we had last spring. As we can see, physical stores are not closing so there will a decline in your customers. In cases like this it worth considering twice if you raise or lower your prices.

3. Customer needs

When you sell, a contract is made between the buyer and the seller. This only applies to that specific business, you do not need to offer the same conditions next time. Please consider that there always will be unsatisfied customers even if you give them all the details prior to the sale.

What can you do? You need customers who are aligned with your service values. Do not retreat, your business will do better in the long run with customers who don’t choose you because of your cheap prices. 

4. What is the plan? Is there any plan?

One thing is for sure, that raising prices will result in profit. Should not take it for granted, but innovation has an important role in a well-built business strategy. You will definitely find a place for the money that you get. Imagine that your customers have accepted your new prices, and now you need to think about the future plans. Developing the service, investing in new human resources is always worth it, but also expanding your product portfolio. 

Without planning you are only one of all the businesses, it would work today but might lose in the competition tomorrow. Because of this, it is essential to not only make a profit on a sale but also make it work in the long run. 

5. Competitors - how much?

It is very useful to monitor the price changes of the competition. Once everyone is raising prices, data is important. If you can jump in with a lower price you can get a huge advantage - but only if you can see the data! 

Monitoring the competition’s stock and price has great importance. You can save a lot of money by taking off the weight of monitoring from your or your employees’ shoulders and instead use a smart software solution. PriceKit is an example of this, monitoring your competitors automatically and notifying you when your prices are much cheaper than your competitors. 

+1 Won’t sell?

You have the lowest prices but the customers are not purchasing on your website. What could be the issue? Customer behavior is a tricky business, if the high quality does not match the price, the product won’t be sold. Price raise or education? Both! For you it is an added experience: numbers are the best way to express how much a product worth.