pricing http://www.wisebread.com/taxonomy/term/1276/all en-US 10 Dumb Ways to Scare Off Potential Homebuyers http://www.wisebread.com/10-dumb-ways-to-scare-off-potential-homebuyers <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-dumb-ways-to-scare-off-potential-homebuyers" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_pink_wallpaper_65405345.jpg" alt="Woman finding dumb ways to scare off homebuyers" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When the time comes to put your home on the market, you will go from being a homeowner to a home seller. Make no mistake, the two are very different, and if you don't want to scare away the buyers, you will need to make a few sacrifices. However, if you avoid the following dumb mistakes, and keep your eyes on the prize, your home will be sold before long. (See also:&nbsp;<a href="http://www.wisebread.com/10-hidden-housing-costs-new-homeowners-dont-expect" target="_blank">10 Hidden Housing Costs New Homeowners Don't Expect</a>)</p> <h2>1. Family Photos and Kids' Drawings Everywhere</h2> <p>It may seem odd to think this is a way to scare people off, but look at it this way: When anyone comes to look around the home you're selling, they are trying to picture themselves, and their family, living there. It's very difficult to do that when the home is clearly one that belongs to another family, with personal evidence of that in every room. If you have framed photos covering every wall, drawings over the fridge and up the staircase, and other shrines to your beloved family and friends, you need to take most of them down. Don't worry; it's not forever. In fact, if you do it, it will take you less time to sell your house, and put them up in your new home.</p> <h2>2. Unusual Smells and Stains</h2> <p>No home can stay new-looking forever. Homebuyers expect the house to be lived in, but what they don't want are odd smells and ugly stains. You may not notice them as you have lived with them for years, but you need to look at your home through fresh eyes. Do a walk-through, and examine every wall, ceiling, and floor in every room. Stains can easily be covered with paint, or shampooed out of carpets. If it's very stubborn, you may have to replace the carpet or rug. Smells, well, the cause needs to be tracked down. If it's mold in the corner of the basement, get it treated. If it's something rotten in the garage, dump it. Your home should look clean and smell fresh. Don't try and mask smells with air fresheners, as they will only make it worse (the sweet smell of vanilla and mold is not a nice combination).</p> <h2>3. Your House Is Stuck in the Past</h2> <p>It's one thing to keep your home in great condition. It's quite another to keep it in the exact same condition that it was in when you first acquired it. If you bought the home 20 years ago, it should not look that way, inside or out. Ideally, you will have performed upgrades over the years to modernize the look and feel of the place. New paint, new carpet or flooring, new appliances, updated cabinets, perhaps even a few additions or a finished basement, can all help with the appeal. Very few people want to move into a home that looks and feels dated. It is a sign that they will have a lot of work to do, and money to spend, to bring the home roaring into the present.</p> <h2>4. It's Dirty and Messy</h2> <p>One of the simplest ways to make a used car sell for more money is to detail it, inside and out. It can literally add thousands to the value. The same is true of your home. If the kitchen is dirty, and the sink is full of dishes, you are sending the wrong message. You are also putting a barrier in front of that potential buyer, and it's your job to remove them. You don't want them to have to imagine how it would look when it's clean and tidy. Show them. Every room should be clean, organized, and free of clutter.</p> <h2>5. You Have&hellip; Wallpaper!</h2> <p>What's wrong with wallpaper? Well, the chances are, it took you a long time to find the wallpaper you really liked. You scoured the pattern books, you mulled it over for days, and when you finally took the plunge, it was no easy task to put up. In fact, most people opt for a professional to do it. So, what are the odds that your perfect wallpaper is also the perfect match for someone who wants to buy your house? Exactly. When they see wallpaper, they see a chore. They see hours of steaming, scouring, scraping, and sweating. Removing wallpaper is about as pleasant as scrubbing the bathroom floor, only it takes 10 times as long. So, get rid of it. Scrape it off now, and put neutral paint in its place. It will vastly improve your chances of getting a buyer.</p> <h2>6. You Follow the Buyer Around</h2> <p>The easiest way to make the buyer feel really awkward, uncomfortable, and pressured, is to be the tour guide for your home. You know the feeling yourself, especially if you've tried to look at a car on the lot and the salesperson is breathing down your neck. This is a huge purchase, and buyers want time and space to look at everything without a chaperon. So, if you can, make sure you're not at home when the buyers come. If you have to be there, confine yourself to just one room, and leave that room when the buyers enter. Go out into the garden or yard, or even the garage.</p> <h2>7. Anything Broken</h2> <p>A door that won't close properly. An appliance that doesn't work well. A piece of tile that has come away from the wall. A cracked window. The list is endless, but whatever it is that's broken in your home, fix it before you put it on the market. Big things, like the roof or siding, that's a no-brainer. But it's the little things that you may have simply gotten used to that can be really off-putting to potential buyers. If they have to jiggle the handle in just the right way to get into the garage, that's not good. If they have to step over the broken piece of concrete in the backyard, they're going to remember that in a negative way. Do a thorough check of the home, and get everything fixed. You do not want to send a signal that you did not do a good job of maintaining your house.</p> <h2>8. Setting the Asking Price Way Too High</h2> <p>It may be a seller's market, but don't take that beyond the limits. If you start at the maximum price you could hope to get, you're excluding a vast number of buyers from ever taking a tour. They may have a maximum amount they want to spend, and your high starting price means they cannot afford to get into a bidding war. Remember, the Internet has given buyers a wealth of information about homes for sale, or recently sold, in your neighborhood. They can do their own comps, and quickly come to the conclusion that you are asking way too much. Now of course, you also don't want to ask too little for the home, because it's possible only one buyer will bite, and you may be stuck with that asking price. So do your homework. See what homes of the same size, age, and condition have sold for in your area, and price accordingly.</p> <h2>9. Poor Landscaping</h2> <p>There is something called curb appeal, and it's literally judging a book by its cover. Your home may be something out of <em>Architectural Digest</em> on the inside, but if it looks like the Addams Family did the yard work, you are not going to inspire people to come and look around. This is the first impression, and it has to count. This also applies to the backyard, too. If it's a bunch of weeds, rocks, rusted cars, and an eyesore called an &quot;above ground pool,&quot; you have your work cut out. People want to see a well loved landscape, front and back, that has green grass, healthy trees, flowering plants, and clean rocks. If it's anything less than that, you may never get the buyer through the front door.</p> <h2>10. Bizarre or Eccentric Features</h2> <p>You may have thought that decorating an entire wall of the den with hubcaps was cool, but potential homebuyers probably won't like it. Anything that is exclusive to the point of being weird or strange is not going to help you sell the home. Maybe the kids wanted a room that was like a forest, complete with lots of fake trees and a dark green carpet. Or perhaps the gray Batcave was something that you just had to have. All well and good when it's your own place, but you cannot expect buyers to share your passions. If you have something that is truly original, it may be time to take it out and go neutral. And in the case of this guy, who <a href="https://www.youtube.com/watch?v=NoInb9JGamA">built a roller coaster</a> through his house to try and sell it, well&hellip;that's not recommended!</p> <p><em>What's the scariest thing you've ever seen at an open house?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/10-dumb-ways-to-scare-off-potential-homebuyers">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-are-the-7-features-home-buyers-want-most">These Are the 7 Features Home Buyers Want Most</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-improve-your-curb-appeal-for-next-to-nothing">6 Ways to Improve Your Curb Appeal for Next to Nothing</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-tourist-towns-that-are-actually-great-to-live-in">6 &quot;Tourist Towns&quot; That Are Actually Great to Live In</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-i-sold-my-house-in-48-hours">How I Sold My House in 48 Hours</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/big-lessons-from-the-tiny-house-movement">Big Lessons From the Tiny House Movement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Home Real Estate and Housing cleaning decorations dumb mistakes housing market landscaping moving pricing selling home Tue, 26 Jul 2016 10:00:11 +0000 Paul Michael 1757121 at http://www.wisebread.com 5 Discount Stores That Are More Expensive Than You Think http://www.wisebread.com/5-discount-stores-that-are-more-expensive-than-you-think <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-discount-stores-that-are-more-expensive-than-you-think" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000049981378_Large.jpg" alt="girls shopping store" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you think you're getting a great bargain by shopping at big box stores that market themselves as purveyors of incredibly low prices, you may want to think again. Consider the alluring &quot;loss leader&quot; pricing strategy, for example. America's discount retailers draw you in by selling certain items at or below cost. But, they make up for lost profits on those dramatic mark-downs by selling you other, higher-priced products during that same visit. By the time you reach the register, the amazing savings you reaped from that doorbuster special is reduced by all the other higher-priced items you purchased. (See also: <a href="http://www.wisebread.com/how-retailers-manipulate-you-into-spending?ref=seealso">How Retailers Manipulate You Into Spending More</a>)</p> <p>Stores use a variety of such techniques to make themselves only <em>seem</em> cheaper than they really are. Read on for our roundup of some of the big name stores that are more expensive than you think.</p> <h2>1. Walmart</h2> <p>&quot;Always the Lowest Price. Always.&quot; That's the original Walmart slogan. But the world's biggest retailer was forced to stop using it when the National Advertising Review Board ruled that Walmart's&nbsp;<a href="http://www.dailykos.com/story/2005/03/07/97586/-Wake-Up-People-Wal-Mart-s-Prices-Aren-t-That-Low#">lowest price claim </a>simply wasn't true. Perhaps a more accurate tagline would have instead utilized the word &quot;sometimes.&quot;</p> <p>Indeed, some of Walmart's items are priced lower than anywhere else. Those key products are strategically chosen commodities that customers like you tend to know the going price of. Therefore, you know a steal when you see one, such as 25 cent cans of Progresso soup or a Dyson upright vacuum for $369. Eventually, you see enough good deals and assume everything Walmart sells is cheap. Alas, it is not. If you pile up your shopping cart with a mix of good deals, bad ones, and regularly priced items, you've merely neutralized your big savings, while helping Walmart achieve its bottom line.</p> <h2>2. Target</h2> <p>Though it caters to the fashion-forward shopper rather than the self-identified thrifty one, Target sells many of the same products as Walmart. In fact, 80% of Target's and Walmart's&nbsp;<a href="http://www.washingtonpost.com/lifestyle/style/2012/10/23/66b97b8e-17d0-11e2-9855-71f2b202721b_story.html">merchandise is identical</a>, according to Charles Fishman, author of <a href="http://www.amazon.com/gp/product/0143038788/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0143038788&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=2VZCDYFUMQHVVWZW">The Wal-Mart Effect</a>. The two stores also offer the same discounts. A recent comparison by Bloomberg Businessweek found only a 46 cent difference between the two retailers per $100 of purchases. You'll save those 46 cents at Target, the analysis found, although Walmart usually wins independent price comparisons. (See also: <a href="http://www.wisebread.com/tips-for-perimeter-perusing-at-target?ref=seealso">How to Find the Secret Deals and Biggest Markdowns at Target</a>)</p> <h2>3. Dollar General</h2> <p>Despite the name, not everything here is a dollar or less. And even when it is, you're not necessarily getting bang for your buck. Case in point: The price tag on bulk goods at Dollar General is often lower due to smaller unit counts, but they can be higher per piece. For instance, an analysis by the Wall Street Journal found a 28-pack of Pampers diapers sells for $10, or 35 cents per diaper, on Dollar General's website. But the same diapers on Walmart's website sells in a 180-pack box for $45.97, or 25 cents per diaper. So, yes, you can get diapers for less money at Dollar General. But they'll cost you 40% more per diaper than if you were to buy a bigger bulk package at Walmart.</p> <h2>4. Amazon Prime</h2> <p>The $99 annual fee you must pay to gain membership to Amazon Prime gets you free two-day shipping on selected products. If you're a fairly frequent Amazon Prime shopper, a membership should work out in your favor. But beware: As a Prime customer, you may not always be presented with <a href="http://www.geekwire.com/2014/amazon-boosts-prime-membership-99-cites-fuel-transportation-costs/">the cheapest item</a>.</p> <p>A GeekWire analysis found that a search for a Hamilton Beach Slow Cooker turns up a <a href="http://www.geekwire.com/2014/amazon-shoppers-question-whether-prime-membership-scam/">Prime-eligible product</a> that costs $49.95 for free two-day shipping. But if you were to click on more options, the same slow cooker is available from a different seller for $38.01 plus $11.99 for shipping, for a grand total of $50. In this case, as a Prime customer, your $99 membership fee would save you a mere 15 cents.</p> <p>In another scenario, the analysis found a vacuum cleaner filter from Dirt Devil was actually cheaper if you didn't use your Prime account. The Prime item cost $13.49, but another vendor was charging $12.74, plus free shipping. Now, this isn't always the case. Often the Prime-eligible item is the cheapest one. But if you are a sporadic Prime shopper rather than a loyal one, or if you don't want to have to dig to ensure you're getting the best deal, a Prime membership might not be worthwhile for you.</p> <h2>5. Kohl's</h2> <p>At Kohl's, <a href="http://sanfrancisco.cbslocal.com/2012/02/22/consumerwatch-investigation-finds-kohls-sale-prices-arent-always-a-deal/">sales prices</a>&nbsp;aren't always what they seem. A CBS hidden-camera investigation conducted between November 2011 and January 2012 found that the discount retailer was in the habit of marking up items as much as $100 from earlier levels before putting them on sale. For Pattie Woody, the result is that the $202.99 sheet set she purchased at a 50% discount had actually been priced at $169.99 before the sale, the investigation found. The pre-sale markup meant that Woody really only saved 40% rather than the advertised 50%. In another example, a twin sheet set was listed at half off the original price of $89.99. But inside the plastic zipper, the earlier price tag read $49.99, indicating the sale was only a $5 savings from the original tag.</p> <p><em>What other tricks do big-name retailers use to make you spend more?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/5-discount-stores-that-are-more-expensive-than-you-think">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-secrets-of-amazons-pricing-strategy-will-help-you-find-the-best-buys">These Secrets of Amazon&#039;s Pricing Strategy Will Help You Find the Best Buys</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-retailers-with-the-absolute-best-customer-service">7 Retailers With the Absolute Best Customer Service</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-stores-with-the-best-price-matching">10 Stores With the Best Price Matching</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-sneaky-online-price-changes">6 Ways to Avoid Sneaky Online Price Changes</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-8-things-that-are-always-cheaper-at-target">The 8 Things That Are Always Cheaper at Target</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping Amazon discounters pricing retail WalMart Mon, 23 Feb 2015 18:00:06 +0000 Brittany Lyte 1302020 at http://www.wisebread.com 5 Pitfalls of Price Promotions http://www.wisebread.com/small-business/5-pitfalls-of-price-promotions <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/marketing/article/5-pitfalls-of-price-promotions" target="_blank">http://www.openforum.com/idea-hub/topics/marketing/article/5-pitfalls-of-price-p...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/5-pitfalls-of-price-promotions" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000004089013Small_0.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Everyone loves a sale, right?</p> <p>Everyone, that is, except for the businessperson who watches as the competitive advantage that he or she thought would result from a price promotion turns into a competitive <i>DIS-</i>advantage.</p> <p>What happened?</p> <ol> <li>Price promotions can train your customers that your prices aren&rsquo;t real. Customers then tend to &ldquo;wait for the sale&rdquo; and are less likely to buy at full price.</li> <li>Price promotions can cost more than they bring in. Higher volumes are nice, but not at the expense of profits. Unless the promotion creates new, loyal customers, you may not have gained anything but some extra work.</li> <li>Frequent price promotions can signal weakness to your competition.</li> <li>When done too frequently, consumers may assume there is something wrong with your product and that it is not actually worth full price.</li> <li>Your ability to deliver quality goods or services may suffer if you become known only for promotional pricing.</li> </ol> <p>As with the rest of running a business, there's a right way to run your price promotions and a wrong way. Let's start with the wrong way.</p> <h3>The Not-So-Profitable Price Promotion</h3> <p>As a young professional, I worked for a small family-owned retail chain whose tagline was &ldquo;Only the Best for Less&rdquo;. This business owner always had several brand name items on sale at a better price than the other stores in the area. The remaining items in the stores were priced just barely under, or the same as, everyone else&rsquo;s prices. Each week, the promotional items changed.</p> <p>The hope, of course, was that consumers would come in for the specials and purchase the remainder of their needed items at the same time whether those items were on sale or not. The success of this strategy varied widely, depending on the items that were on special, how deep the discount was, and whether or not the other local store owners decided to match the sale price. Frequently, they did.</p> <p>In the end, the strategy backfired and the business decided to drop their tagline and change their marketing approach, but not before some damage was done.</p> <p>What happened?</p> <p>Price conscious customers caught on pretty quickly, and it wasn&rsquo;t unusual for someone to complain that the claim of &ldquo;Only the Best for Less&rdquo; was not always true. While the business owner had a policy of meeting other pharmacy&rsquo;s prices if a customer showed him their ad, he couldn&rsquo;t compete with the big box stores when they started opening in his area. He had never established a reputation for service and quality, only for price, and making that change was expensive, painful, and not very successful.</p> <h3>Price Promotions Done Well</h3> <p>One of the best-known examples of a successful promotional pricing policy is the one used by Nordstrom. They have managed to avoid all five problems.</p> <p>To begin with, Nordstrom has many different value/price levels for their regularly priced merchandise &mdash; you can buy a pair of shoes for $50, $500, or anywhere in between. In this way, they appeal to consumers at all price levels.</p> <p>In addition, they have three widely anticipated sale events per year. These events are not closeouts of leftover merchandise &mdash; they are true sales on new merchandise, much of it brought in for the sale. However, not everything in the store is on sale at those times &mdash; far from it.</p> <p>A customer who shops during non-sale times knows that they have to purchase at full price, or take their chances with the once-in-a while season-end clearance rack, because it&rsquo;s highly unlikely that the item they like will ever be available at a less than full price.</p> <p>In addition, the sale events themselves are great marketing vehicles. They bring lots of customers into the store, and many of them buy non-sale merchandise while they&rsquo;re at the sale. But better yet, many of those customers return at non-sale times because the quality of the sale event turns them into loyal Nordstrom customers.</p> <h3>Keep Your Price Promotions Proper</h3> <p>The ultimate goal of a price promotion is to get and keep new customers, and to encourage existing customers to buy goods or services they may be buying elsewhere from you instead. Ultimately, you want both types of customers to come for the price, but stay for the selection, quality, and service.</p> <p>These principles apply to all businesses, not just retail businesses. Whether you sell goods or services, and no matter what type of customers you serve, you can benefit from promotional pricing &mdash; as long as you keep that ultimate goal in mind.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/joanne-berg">JoAnne Berg</a> of <a href="http://www.wisebread.com/small-business/5-pitfalls-of-price-promotions">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-pumpkin-lady-s-secret-to-business-success">My Pumpkin Lady’s Secret to Business Success</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-simple-ways-to-market-your-side-business">6 Simple Ways to Market Your Side Business</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-sign-up-for-half-price-flights-and-free-hotels">How to Sign Up for Half-Price Flights and Free Hotels</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/where-oh-where-are-my-worms-be-on-your-toes-when-ordering-from-small-web-businesses">Where Oh Where Are My Worms? Be On Your Toes When Ordering From Small Web Businesses</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center business strategy customer service marketing pricing pricing strategy promotions small business Wed, 27 Apr 2011 19:49:35 +0000 JoAnne Berg 528211 at http://www.wisebread.com Party Like It's 19.99: The Psychology of Pricing http://www.wisebread.com/party-like-its-1999-the-psychology-of-pricing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/party-like-its-1999-the-psychology-of-pricing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/359064621_c6093974b.jpg" alt="Ikea bed for sale" title="Ikea bed for sale" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Why does everything on sale &mdash; well, nearly everything for sale and not simply &quot;on sale&quot; &mdash; have a .99 price ending?</p> <p>From what I can tell, .99 is a signal to consumers that either means &quot;Wow, this widget is a great bargain,&quot; or &quot;Whoa, you're manipulating me into thinking that this widget is a great bargain.&quot; (See also: <a href="http://www.wisebread.com/what-clearance-price-is-your-achilles-heel">What Clearance Price Is Your Achilles Heel?</a>)</p> <p>I did some poking around to see why prices tend to end in 9s and .99s &mdash; and what retailers are trying to communicate to consumers when prices end with other numbers as well.</p> <h3>The Rationale for $19.99 and Similar Endings in 9</h3> <p>The use of &quot;9&quot; sends a signal that an item is a great value and possibly the lowest price available. Sale prices end in 9s and .99 so often that shoppers associate these numbers with a markdown even when the <em>starting price</em> contains a 9.</p> <p>Consumers tend to place more emphasis on left digits than right ones (also known as <a href="http://www.sciencedaily.com/releases/2009/02/090223221526.htm">the left-digit effect</a>). And they &quot;<a href="http://www.happen.com/index.php/home/articles/49-psychology-of-pricing">ignore the least significant digits rather than do the proper rounding</a>.&quot; I like to think that I round $19.99 up to $20.00 rather than mentally truncating the last two digits to $19.00, but research suggests that most people retain the first two numbers only, possibly because people have gotten used to .99 as a price ending.</p> <p>The .99 ending seems to be a default pricing strategy. Retailers intentionally price items as $X.99 to send the message that an item is a great buy and has been recently marked down. Or they simply don't put much thought into pricing and end all prices with .99 to match pricing schemes of most competitors.</p> <p>In situations where items can be sorted by price, such as e-commerce and real estate databases, using $.99 or $399,999, for example, allows the seller to keep an item in certain price bands or break points unavailable to those charging $1.00 or $400,000 for similar items. (See <a href="http://www.nytimes.com/2007/02/18/realestate/18cov.html">&quot;The Psychology of Pricing</a>&quot; relating to real estate from The New York Times<em>.</em>)</p> <h3>The Meaning of 0 and .00</h3> <p>Sellers use 0s and .00 to convey that products are of premium quality.</p> <p>From the buyer's perspective, these prices seem arbitrary, not reflecting cost but rather the seller's preference. Actually, that is the message intended by those selling luxury and high-end brands. A designer handbag at Neiman Marcus is priced at $625.00, not $624.99; similarly, Godiva sells its chocolate truffle assortment for $36.00, not $35.99. The seller can, theoretically, name a price rather than be subject to clamor by consumers for lower pricing.</p> <p>Some mid-range retailers also use .00 for standard pricing (J.C. Penney and L.L. Bean for example) and .99 for sale pricing. Still others use .00 for higher-end product lines but retain fractional pricing (e.g., .99 or .97) for value product lines. (See <a href="http://www.happen.com/index.php/home/articles/49-psychology-of-pricing">Psychology of Pricing</a> from Happen.)</p> <p>The exceptions to this premium-quality rule are the many <a href="http://www.wisebread.com/getting-it-done-at-dollar-tree">&quot;dollar&quot; stores</a>.&nbsp;</p> <h3>The Differentiating Power of 4 and 7</h3> <p>Unusual prices ending in 4s or 7s tend to be seen as precisely priced items. The signal is that the seller has scrutinized its costs and determined the optimal price, fair to both the seller and buyer.</p> <p>Certain companies may also use non-standard pricing (that is, avoiding the use of 9s and 0s) just to be different. Lowe's and The Home Depot sell certain items for $1.74 or $294 rather than $1.99 or $299.</p> <p>Pricing that ends in anything besides a &quot;9&quot; (not just 4 and 7) typically stands out to the buyer. Some sellers adopt certain endings as a signature pricing signal. Walmart, for example, ends many of its prices in 8, positioning itself as just a tad less expensive than retailers that price items ending in 9.</p> <h3>Tips for Consumers</h3> <p>Recognize that numbers speak to your subconscious and have meaning based on previous shopping experiences and retailers' wiles. Compare prices to make sure you are getting a bargain. Don't assume that anything priced at $19.99 is a great deal.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/party-like-its-1999-the-psychology-of-pricing">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-9-everyday-products-with-the-biggest-markups">The 9 Everyday Products With the Biggest Markups</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/cheat-sheet-retail-markup-on-common-items">Cheat Sheet: Retail Markup on Common Items</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debit-or-credit-which-one-should-you-choose-at-the-checkout">Debit Or Credit? Which One Should You Choose At The Checkout?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-secrets-of-amazons-pricing-strategy-will-help-you-find-the-best-buys">These Secrets of Amazon&#039;s Pricing Strategy Will Help You Find the Best Buys</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beware-the-nasty-secret-of-the-craigslist-free-section">Beware, The Nasty Secret Of The Craigslist Free Section</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Shopping money psychology pricing sale pricing Thu, 21 Apr 2011 10:24:09 +0000 Julie Rains 526198 at http://www.wisebread.com The Psychology Behind Making Sales and Setting Price Points http://www.wisebread.com/small-business/the-psychology-behind-making-sales-and-setting-price-points <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/the-psychology-behind-making-sales-and-setting-price-points-nora-dunn" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/the-psychology-behind-mak...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/the-psychology-behind-making-sales-and-setting-price-points" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000003591640XSmall.jpg" alt="price sign" title="price sign" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Setting price points and making sales involves a delicate balance between offering value (i.e., what the customer demands) and making profits (i.e., what you need). Here are a few techniques that <em>create </em>value for your customers while keeping your profit margins reasonable. In fact, in some cases you can even get your customer to buy considerably more than they planned to &mdash; happily.</p> <h3>Stop &quot;Selling&quot;&nbsp;</h3> <p>Most consumers are on guard as soon as they hear the word &quot;sales&quot; and cringe at the concept of being &quot;sold&quot; something. Day in, day out, we endure sales pitches of all kinds, in all formats. On television, in newspapers and magazines, on billboards, on public transportation, in stores, online &mdash; the barrage is constant. In fact, I'll bet that no matter where you are right now, you can't last more than a few minutes without having some sort of advertising thrown at you.</p> <p>Because of this torrent of sales pitches coming at us, we've become desensitized to it. Most of the time, we don't even see the sales pitches any more, and if we do, we tend to run in the opposite direction as quickly as we can.</p> <p>Sales gets a bad rap these days.</p> <p>So how do we sell our customers on the awesome value of our product or service without making them feel like they've been &quot;sold&quot; to?</p> <h3>Let Them Choose</h3> <p><em>Scenario One</em>: You walk into a movie theater. There are two sizes of popcorn offered: small for $4 and large for $6. Which one do you buy?</p> <p>The large is probably a little over-the-top since you just had dinner, so you choose small and probably order a drink to go along with it (more on this later).</p> <p><em>Scenario Two</em>: You walk into a movie theater. There are three sizes of popcorn offered: small for $4, medium (formerly large in the previous example) for $6, and large for $8. <em>Now </em>which one do you buy?</p> <p>Nine times out of ten, you'll probably choose the medium size. It doesn't fall to any sort of extreme in terms of size or price. It simply seems the right thing to do.</p> <p>Yet, in scenario one, you were loathe to gorge yourself on a &quot;large&quot; popcorn &mdash; the very same popcorn which seems to be a nice moderate option in scenario two.</p> <p>What gives?</p> <p>People want choice, and they don't like to make waves. The easiest thing for most people to do when making a quick choice is to go with the middle option, so make sure there's a middle option available. By offering just two options or sizes, you could be limiting the number &mdash; and quality &mdash; of sales you make.<strong> </strong></p> <h3>Provide Package Deals</h3> <p>Even easier than choosing the middle option is to choose just one option. Movie theaters are notorious for bundling their popcorn, drinks, and treats into one &quot;special&quot; deal, and once you're keen to the package-deal concept, you start to see it everywhere: package vacations (insurance and all), bundled internet and television, utilities, etc.</p> <p>I was recently on a flight that offered light meals and snacks for a fee. There were a few package deals on the meal card, complimentary items like coffee and a muffin, or chips and soda. I was even tempted by a few of these &quot;deals,&quot; until I did the math and discovered that the &quot;meal deal&quot; was not a penny cheaper than buying each item separately &mdash; and I realized that I didn't even really want what was on offer to begin with.</p> <p>Something psychological happens when we see (well-presented) package deals. We see value. <em>Look honey! For just one price, we can have all this. </em>Most people won't take the time and effort to price out each component of the package, or even to question whether they would buy each component separately.</p> <p>Fast food restaurants have tuned into this concept brilliantly; some stores don't even display individually priced items any more; it's all about the meal deal. There's a reason it sells: It's easy to buy.</p> <h3>Make a Special Offer</h3> <p>Similar to the package deal is the special offer. At a steak house the other night, the server came to the table and introduced himself. When he rattled off the specials, he piqued everybody's interest when he mentioned the lobster tail and steak dinner for what seemed like a reasonable price, especially after he detailed every component of the meal beautifully. The whole table said &quot;I'll have that!&quot;</p> <p>Knowing that you can add a lobster tail to your steak dinner any time (and out of morbid curiosity), I calculated the original price of the &quot;special offer&quot; we just ordered. Surprise, surprise: It was the same price as it would be any day of the week.</p> <p>What did the server do? He simply made it easy for us to order the lobster. Any one of us at the table might have felt we were going overboard by ordering the lobster tail if we did so directly from the menu, but when it was presented as a special, it sounded delicious and the price seemed reasonable.</p> <p>Even after we realized that the steak and lobster wasn't really &quot;on sale,&quot; none of us felt particularly duped. The server disclosed the price when he mentioned the special, and we agreed to it when we ordered the dinner (and the lobster was delicious). He even did such a great job of describing the meal that we enjoyed it even more when it arrived than we may otherwise have. He tantalized our taste buds with his special offer sales pitch.</p> <p>How can you tantalize your customers' taste buds? Make a special offer easily available and attractive, and your customers will up-sell themselves.</p> <h3>Break Your Product Down into Components</h3> <p>Contrary to the package deal, you might be able to make more sales (depending on the product or service you offer) by breaking it down into many different components. Apple employs this concept, as evidenced by all the accessories they make for their products.</p> <p>You can't just buy an iPhone; you also need some sort of case, screen protectors, and any number of other components that both personalize and functionalize your phone. When contemplating a full sales rack of components that make your phone even cooler, most people buy more than they originally intended.</p> <p>The customer is happy: They personalized their iPhone with an array of products and accessories. In fact, with this strategy, Apple leaves the door open for more sales, since the customer can later buy even more components at their whim.</p> <p>Despite a difference in approach, these strategies all follow a few common themes: Give your customer choice, and make it easy for them. Customers in a hurry (and let's face it &mdash; who isn't in a hurry these days?) will enjoy selecting a middle option when given at least three choices, and they will gravitate towards a package deal as long as it remotely resembles what they crave.</p> <p>Meanwhile, customers looking for value will enjoy customizing their products or services with a menu of options or components that empower them, often buying more than they originally intended. We all still love a special deal, especially if it's so well-presented that it can't be refused.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/small-business/the-psychology-behind-making-sales-and-setting-price-points">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-find-freelance-clients-part-two">How to Find Freelance Clients: Part Two</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-grow-your-solo-business-without-hiring-employees">How to Grow Your Solo Business Without Hiring Employees</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center marketing pricing small business Thu, 18 Nov 2010 22:10:45 +0000 Nora Dunn 291805 at http://www.wisebread.com 4 Pricing Strategies to Promote Value http://www.wisebread.com/small-business/4-pricing-strategies-to-promote-value <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/4-pricing-strategies-to-promote-value-lynn-truong" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/4-pricing-strategies-to-p...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/4-pricing-strategies-to-promote-value" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000005715505XSmall.jpg" alt="Wine price" title="Wine price" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>You know the value of your product &mdash; the benefits and innovations that set your products or services apart from the rest. You want your customers to think about these factors when they weigh your product against competing selections, but odds are that they won't. Of the many options on the shelf, customers are likely focusing on the price tag. Don't think lowering your prices is the best route to take, though. Consistently undercutting your competitors will get you more customers at first, but if that is <em>all</em> you do, you can kiss your brand equity and profit margins goodbye.</p> <p>Don't get sucked into a price war. Instead, change the way your customers view your products. Convince them that your product isn't just a commodity that can easily be substituted by the next, cheaper item on the shelf. Marco Bertini and Luc Wathieu describe <a href="http://hbr.org/2010/05/how-to-stop-customers-from-fixating-on-price/ar/1">four strategies to stop customers from fixating on price</a>. Your main weapon? The price.</p> <h3>1. Specify Pricing by Value</h3> <p>Paradoxically, the best way to draw customer attention away from price is to revise your pricing strategy. One option involves changing the way you present the prices of your various offerings. Divert their focus from the price itself, and specify the value you're offering.</p> <p>Goodyear did this with great success. The tire company had a hard time convincing their customers that their tires were worth the premium price. So they began to base the pricing on how many miles they're expected to last. Instead of using a lot of engineer speak and going into the complexities of their innovations, they figured out a simple way to communicate their premium value (thus the reason for their premium pricing). That's the kind of value customers are willing to <em>pay</em> for.</p> <h3>2. Raise Your Price<strong><br /> </strong></h3> <p>In a price-conscious market, consumers usually pick the product with the lowest price, <em>if they think the products are of equal value</em>. Throw in a price that's unusually high, and you'll grab a second look. Take advantage of the curiousity and convey benefits that they hadn't considered before.</p> <p>For example, Burt's Bees priced their personal care products at 80% to 100% over competing, nonnatural brands. Customers were shocked by the unusually high prices, but they also wondered what made Burt's Bees' products so special. They discovered that Burt's Bees' offerings were made with natural ingredients by a socially responsible organization. And to many customers, this mattered.</p> <h3>3. Offer Menu Pricing<strong><br /> </strong></h3> <p>Allow customers to select parts or services for their individual needs. Breaking down the prices can help customers focus on value than the lump sum total. It also allows price conscious customers to opt for basic services while those who are willing to pay for value will upgrade.</p> <p>Bertini and Wathieu conducted several experiments to test this strategy. In one experiment, the participants were asked to choose between a $165 nondirect, no-frills flight and a $215 direct flight with meal service and in-flight entertainment. They created two levels of amenities for the $215 flight on the assumption that better quality would convince more participants to choose the higher fare, but it turned out that quality didn't matter when the fares were presented as a lump sum. Rather, it was when the fares were itemized and the quality of the amenities made explicit that more participants opted for the higher fare.</p> <p>While price partitioning is great way to highlight your competitive advantages, this strategy often backfires when companies itemize fees for standard, unavoidable, or mandatory features &mdash; like check-in and baggage handling.</p> <h3>4. Offer Personal Relevance<strong><br /> </strong></h3> <p>This strategy is effective when <a href="http://ad.doubleclick.net/clk;218395891;41475468;y?http://www201.americanexpress.com/sbsapp/FMACServlet?request_type=alternateChannels&amp;lpid=300&amp;openeep=17460&amp;ccsgeep=17460">customers</a> are presented with several options designed to appeal to different tastes. With price differences out of the picture, customers will need to discover which option suits their needs best. It compels them to base their purchasing decisions on the differentiating features of your products and not solely on the price.</p> <p>One example of this strategy at work was Apple's decision to sell every track available on iTunes at the uniform rate of 99 cents per track. Steve Jobs was criticized for not taking advantage of the fact that high-demand products can carry a higher price and for disregarding the conventional practice that lower-demand products must be priced lower. As it turns out, this was a profitable move for Apple. When customers shop on iTunes, they're less fixated on price, more sensitive to the selection and their own musical tastes, and more willing to buy more tracks.</p> <script type="text/javascript"> federated_media_section = "platinum"; </script><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/lynn-truong">Lynn Truong</a> of <a href="http://www.wisebread.com/small-business/4-pricing-strategies-to-promote-value">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-find-freelance-clients-part-two">How to Find Freelance Clients: Part Two</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-grow-your-solo-business-without-hiring-employees">How to Grow Your Solo Business Without Hiring Employees</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center marketing pricing small business Fri, 02 Jul 2010 18:11:22 +0000 Lynn Truong 113418 at http://www.wisebread.com Factors to Consider in Your Pricing Strategy http://www.wisebread.com/small-business/factors-to-consider-in-your-pricing-strategy <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/factors-to-consider-in-your-pricing-strategy-scott-allen" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/factors-to-consider-in-yo...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/factors-to-consider-in-your-pricing-strategy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000008627544XSmall.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>How did you decide how much to charge for your product or service? Did you base it on the competition? Some margin above your cost? Or did you throw a few numbers in a hat and pick one? A crystal ball, perhaps?</p> <p>I've seen many companies that didn't seem to give their pricing much more thought than that. Outside of a few industries, such as retail and energy, in which pricing is heavily studied and practices are well-established, pricing is often an afterthought, based on only one main factor plus some gut feeling, rather than the many factors that should be considered. The price of your product is more than just a number you plug in to your forecasting spreadsheet. It's an essential part of your marketing strategy.</p> <p>These are some of the strategic factors you need to consider regarding your pricing.</p> <h2>1. Positioning</h2> <p>You know the old saying, &quot;You get what you pay for.&quot; Your price affects the perception of your product in the market. For example, you could position yourself as the low cost leader, like Wal-Mart has done with their &quot;price rollback&quot; promotions and their new slogan: &quot;Save money. Live better.&quot; By contrast, consider Acura's recent &quot;Excuses&quot; campaign: &quot;There are excuses for spending money on luxury, and then there are reasons.&quot; On an exclusive luxury product, a low price may signal lower quality.</p> <h2>2. Cost</h2> <p>You're in business to make a profit, and you probably have a good idea just how much profit you'd like to make on your investment. If you have outside investors, they certainly do. Calculate the variable cost per sale and the fixed <a href="http://ad.doubleclick.net/clk;218396076;41475586;v?http://www201.americanexpress.com/sbsapp/FMACServlet?request_type=alternateChannels&amp;lpid=298&amp;openeep=17460&amp;ccsgeep=17460">overhead costs</a>. What price do you need to be at in order to achieve your desired profitability based on your sales projections? Be sure to combine this with your demand curve data, i.e., keep in mind that changing your price will change your sales forecast.</p> <h2>3. Environmental Factors</h2> <p>Are there any external constraints that could affect pricing? For example, most cities set a standard rate for taxicabs. In the medical field, insurance companies and government programs will only reimburse a certain price. Also, consider how your competitors may react to your pricing. Will too low a price from you trigger a price war, or at least a new price point that may reduce your competitive differentiation?</p> <h2>4. Demand Curve</h2> <p>Generally speaking, all other things being equal, a lower price will increase demand and a higher price will reduce demand. Any time you change pricing, track the demand changes closely. In most industries, you can't be constantly changing pricing, but you will still, over time, gain insights that will allow you to optimize your profitability. You can supplement this with market research, asking research participants if they would buy the product or service at various price points</p> <h2>5. Market Control</h2> <p>A good demand curve model can help you optimize your pricing for maximum profitability, but that may not always be your best strategy. For example, lower prices when you first launch may be critical to help you gain market share against established competitors. And higher revenues at a slim profit, or even a loss, signal that the company will likely reach profitability later by achieving economies of scale, volume discounts from suppliers, or upsells to existing customers of higher-profit products. Consider Amazon.com, which was posting record-breaking revenues, but took six years to achieve profitability because they had held their prices low in order to achieve market penetration. On the flip side, lower prices can be used by an established business to hedge against competitive threats from newcomers.</p> <h2>6. Psychological Factors</h2> <p>Even if you don't have any direct competition, customers will have a concept of what constitutes a fair price based on other things they are familiar with. For example, I wonder if peanut butter and jelly would have been so successful if one cost five times what the other did. Remember that you're not only competing against your direct competitors, but potentially against everything else they can spend their money on. Also, there are often key price points that will make a significant different in people's willingness to buy. For example, whenever a consumer electronics product breaks the $100 or $50 price point, there's usually a surge in sales. And yes, &quot;.99&quot; pricing really does seem to work (typically about 10% more buyers), even though logically it shouldn't.</p> <h2>7. Value</h2> <p>What is your product worth to your customers? Does it make or save them money? If so, its value should significantly exceed its price. If it does, you can base your pricing more on its value to them than what it costs you to produce it. If it doesn't, you probably need to rethink your offering!</p> <p>As you've probably realized by now, because there are so many different competing factors, there are a lot of different ways to calculate the actual number for your price. I recommend you run several pricing calculations so that you're fully aware of the range of possible prices. At an absolute minimum, you <em>must</em> consider:</p> <ul> <li><strong>Cost-plus pricing. </strong>You have to be able to turn a reasonable profit, period.<br /> &nbsp;</li> <li><strong>Fair pricing.</strong> No matter your cost, no matter the value, if people don't perceive it as fair, they won't buy.<br /> &nbsp;</li> <li><strong>Value pricing. </strong>This should be your upper limit. If it's not the highest number you calculate, something's wrong.</li> </ul> <p>In addition to these, consider the other strategic factors and find the number that provides the best balance among them. With a decent offering and a solid business model, you should be able to come up with a price that's well above your cost, a little below the &quot;fair&quot; price, and well below the perceived value.</p> <p>Pricing is an essential element of your marketing strategy. Don't pull a number out of thin air. Give it the time and consideration it's due.</p> <script type="text/javascript"> federated_media_section = "gold"; </script><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/scott-allen">Scott Allen</a> of <a href="http://www.wisebread.com/small-business/factors-to-consider-in-your-pricing-strategy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-grow-your-solo-business-without-hiring-employees">How to Grow Your Solo Business Without Hiring Employees</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-smart-ways-to-get-a-small-business-loan">10 Smart Ways to Get a Small Business Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center pricing small business Mon, 31 May 2010 01:15:40 +0000 Scott Allen 92355 at http://www.wisebread.com Why You Should Raise Your Prices http://www.wisebread.com/small-business/why-you-should-raise-your-prices <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/why-you-should-raise-your-prices-kate-lister" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/why-you-should-raise-your...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/why-you-should-raise-your-prices" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000008129754XSmall.jpg" alt="Cash register" title="Cash register" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>The quickest, easiest way to increase your income is to raise your prices. If you're worried about losing customers, do the math. You'll be surprised at how many you can lose and still make more money.</p> <p>Here's an example. It's a bit dense with numbers, but stick with it. This is an important concept and one that will give you a distinct advantage over those who don't understand it.</p> <p>Let's say your product or service sells for $200 and your cost is $150. Now you raise your price by 5% to $210 per unit and, as a result, you lose 10% of your customers.</p> <p><strong>Before</strong><br /> Price Per Unit: $200, Cost Per Unit: $150, # of Customers: 1,000<br /> Gross Income: $200,000, Direct Costs: - $150,000, Gross Profit: $50,000<br /> Gross Profit Margin: 25%</p> <p><strong>After</strong><br /> Price Per Unit: $210, Cost Per Unit: $150, # of Customers: 900<br /> Gross Income: $189,000, Direct Costs: - $135,000, Gross Profit $54,000<br /> Gross Profit Margin: 28.5714%</p> <p>You're actually making $4,000 more profit with 100 less customers!</p> <p>In fact, in this example, you could lose almost 17% of your business and still break even from a 5% price increase ($50,000 / 28.6% = $175,000).</p> <p># of Customers: 833<br /> Gross Income: $175,000, Direct Costs: - $125,000<br /> Gross Profit: $50,000</p> <p>The same math shows why it's a very bad idea to offer discounts, figuring you'll make it up on volume. A 5% price decrease in this same situation would require a 25% increase in sales just to stay even.</p> <p><strong>Before</strong><br /> Price Per Unit: $200, Cost Per Unit: $150, # of Customers: 1,000<br /> Gross Income: $200,000, Direct Costs: -$150,000, Gross Profit: $50,000<br /> Gross Profit Margin: 25%</p> <p><strong>After</strong><br /> Price Per Unit: $190, Cost Per Unit: $150, # of Customers: 1,250<br /> Gross Income: $237,500, Direct Costs: - $187,500, Gross Profit $50,000<br /> Gross Profit Margin: 21.0526%</p> <p>That's an extra 250 customers you'll somehow need to woo with your new low prices!</p> <p>If all that hasn't convinced you to raise your prices and NOT discount, consider that price buyers:</p> <ul> <li>Are your least loyal customers</li> <li>Complain more than premium price buyers</li> <li>Expect more than premium buyers</li> <li>Will blab about the deal they got to your full price customers</li> </ul> <p>In a prior life, I owned a vintage airplane ride business. It was so popular we could hardly keep up with demand. We often had to turn customers away. Adding planes wasn't really an option as there aren't many of them around any more. Finding pilots whose spouses allowed them out to play with airplanes in their spare time wasn't easy, either. Putting a spreadsheet to work, we did just the kind of math shown here to evaluate how much business we could afford to lose and still break even. Over the next two years, we eventually tripled our prices before we started to see any fall off in demand. Then we carefully tweaked them until we found that &quot;just right&quot; price that allowed us make the most amount of money with the least amount of work.</p> <p>Having fewer customers <a href="http://ad.doubleclick.net/clk;218395199;41474888;e?http://www.plumcard.com/?eep=17460">saved</a> us money in other ways. There was less wear and tear on the airplanes, less oil and spark plug changes, less frequent engine overhauls, fewer phone calls/staffing issues, a reduced need for pilots, and generally an easier time making money.</p> <p>By this point, you're hopefully wondering about your own pricing strategy. Here's a tip. If no one's complaining about your prices or if you have more work than you can handle, you're due for a price increase, or two, or three. Back up those higher prices with a better product/service, better customer service, friendlier staff, or other value-added strategies, and you'll never have to worry about price wars again.</p> <p>It's always easy to lower your prices if you find you've gone too far. Better yet, keep your prices high to maintain the perceived value of your product or service and offer frequent-buyer coupons, limited-time only-discounts, bulk purchase offers, or other such programs that increase the per customer purchase, and/or lower your unit or fixed costs.</p> <p>Price wars, discounting, and other price-based competition may make you busier, but as the numbers show, busier is not always better. Unless you &quot;make it up on volume&quot; you'll be out of business <em>and</em> a whole lot more tired than if you'd just left your prices alone.</p> <p>We'd love to hear your pricing successes (or failures). Has raising your prices worked for you? How about lowering them? Sharing is good. Do tell.</p> <script type="text/javascript"> federated_media_section = "plum"; </script><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kate-lister">Kate Lister</a> of <a href="http://www.wisebread.com/small-business/why-you-should-raise-your-prices">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-grow-your-solo-business-without-hiring-employees">How to Grow Your Solo Business Without Hiring Employees</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-smart-ways-to-get-a-small-business-loan">10 Smart Ways to Get a Small Business Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center pricing small business Sat, 29 May 2010 01:04:07 +0000 Kate Lister 86464 at http://www.wisebread.com 6 Common Money Mistakes Small Business Owners Make http://www.wisebread.com/small-business/6-common-money-mistakes-small-business-owners-make <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/6-common-money-mistakes-small-business-owners-make-joanne-berg" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/6-common-money-mistakes-s...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/6-common-money-mistakes-small-business-owners-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000000928541XSmall_0.jpg" alt="Closed sign" title="Closed sign" class="imagecache imagecache-250w" width="250" height="159" /></a> </div> </div> </div> <p>We&rsquo;ve all known businesses that appear to be doing well, but end up going out of business because they&rsquo;ve made major mistakes in pricing, cost control, or financial management. Here are some of the areas where these problems arise, and some suggestions for how to avoid making the same mistakes.</p> <h3>1. Pricing Strategy</h3> <p>Pricing is probably the most important decision you make every day. If your prices are too high, you won&rsquo;t do enough volume. If you set them too low, you may get lots of sales, but you will lose money. So how do you find the right price?</p> <p>If you&rsquo;re in a business where your prices can be directly compared to your competitors&rsquo; (shoes, for example), your flexibility is limited. You can always run specials and have sales, but your competitors may follow. You&rsquo;re better off trying to create a sense of immediacy so that your customers buy as much as possible at full price. This is where good marketing makes all the difference. Try different approaches, track customer behavior, and make adjustments as you learn what works.</p> <p>On the other hand, many non-retail businesses and businesses with patented products have more flexibility in their pricing. It&rsquo;s common here for entrepreneurs to actually under-price their products. Most advisors recommend starting a little high and monitoring the response &mdash; it&rsquo;s easier to lower a price than to increase it.</p> <h3>2. Tracking Gross Profit</h3> <p>Many small businesses do not correctly account for the full cost of their products or services. It&rsquo;s much more complex than many realize. For example, if you are a clothing retailer, the cost of the freight to your store is part of the cost of the clothes. You also need to track and factor in shrinkage, damages, and unsalable returns &mdash; all of those costs that can eat up your profit margin.</p> <p>If you&rsquo;re a service provider, the wages that you pay the employees providing the service; including payroll taxes, insurances, and benefits; should be considered &ldquo;cost of services provided.&rdquo;</p> <p>Accurately accounting for cost of goods sold is important so that you can control those costs and also so that you can easily monitor gross profit, which is the difference between sales dollars and the cost of goods or services sold. It&rsquo;s not enough to just monitor sales volume &mdash; what matters is the profitability of those sales.</p> <p>If your gross profit percentage starts to slip, you need to immediately find out why and fix it.&nbsp;It could be caused by a cost issue, a pricing problem, or both. Don&rsquo;t wait until the end of the month to look at your gross profit numbers &mdash; put a system in place where you can monitor them weekly or even daily.</p> <h3>3. Credit and Collections</h3> <p>Many small businesses do a poor job of credit and collections. In many industries, customers expect to buy on credit, and in many service businesses, fees are billed after services are performed. This means that your business is making an investment in your customer or client&rsquo;s company. Treat this with the seriousness it deserves! Use a solid credit-checking process, set realistic credit limits, be very clear about what your credit terms are, and stick to those terms. You can also ask for a deposit up front, or a retainer if you are providing services. You may lose a sale or two, but it&rsquo;s better than never getting paid.</p> <h3>4. Budgetary Controls</h3> <p>Every business has overhead expenses, which can get out of control. These are things like rent, utilities, administrative employees, insurance, and office supplies. You should prepare an annual budget for these. Have your accountant load it into your accounting software, and then run a &ldquo;budget vs. actual&rdquo; report each month. This will show you where spending is creeping up.</p> <h3>5. Necessary Business Infrastructure</h3> <p>Small businesses often skimp on the personnel, resources, and infrastructure needed to run a business effectively. You need top-notch accounting help to track your day-to-day activity as well as a good CPA. You also need a robust accounting system, a great attorney and insurance broker, good computer systems, and a responsive IT firm to keep your systems running, Make sure these are in your budget.</p> <h3>6. Taxes</h3> <p>You need to be informed on tax issues in order to make good business decisions. These taxes include income taxes, sales and use taxes, payroll taxes, and business property taxes. Don&rsquo;t be afraid to ask questions of your tax advisor when you need to. The cost of non-compliance, especially with payroll taxes, can be staggering, and knowing how to manage your business decisions with income taxes in mind can leave more money in your pocket.</p> <p>Even if you&rsquo;re already doing a good job in these six areas, you may be able to enhance your profitability by making small improvements to your current procedures. If you&rsquo;re <em>not</em> doing these things, I encourage you to start implementing them. You&rsquo;ll be amazed at the results.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/joanne-berg">JoAnne Berg</a> of <a href="http://www.wisebread.com/small-business/6-common-money-mistakes-small-business-owners-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-grow-your-solo-business-without-hiring-employees">How to Grow Your Solo Business Without Hiring Employees</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-big-business-accounting-tools-every-side-gig-needs">4 Big Business Accounting Tools Every Side Gig Needs</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-i-got-over-the-hump-and-sold-my-blog-for-3-million">How I Got Over the Hump and Sold My Blog for $3 Million</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center accounting business mistakes pricing small business small business taxes Fri, 08 Jan 2010 20:17:01 +0000 JoAnne Berg 427232 at http://www.wisebread.com My Purchase Rang Up Wrong! Could the Law Be on My Side? http://www.wisebread.com/my-purchase-rang-up-wrong-could-the-law-be-on-my-side <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/my-purchase-rang-up-wrong-could-the-law-be-on-my-side" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/checkout.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p class="MsoNormal">Whether you coupon, frequent the sales, or just like to keep your eye out for everyday low pricing, most of us are very aware of what we pay for our purchases.<span> </span>As the economy continues to worry shoppers, we will become increasingly more conscious of the prices we pay for everyday items (toiletries, food, and medicines) as well as the big-ticket ones.<span> </span></p> <p class="MsoNormal">Despite our best intentions, however, pricing errors do occur.<span> </span>Whether you get overcharged for an item, pay for more than one of something, or simply find a discrepancy between the shelf price and the scanned price, there are some very important tips you need to know about.<span> </span></p> <p class="MsoNormal"><strong>Federal law protects consumers.</strong><span> </span>While it has been awhile since the last <a href="http://www.ftc.gov/reports/scanner2/scanner2.shtm">Price Check</a> report conducted by the Staff of the Federal Trade Commission and the U.S. Department of Commerce&#39;s National Institute of Standards and Technology, it shows that the federal government has improper pricing and scanning on their radar.<span> </span>Weight and Measures officials tracked the accuracy of price scanners and register pricing in over 35 states to get the results revealed in the report.<span> </span>Pricing errors occurred more often in sale-priced items, and overcharges were slightly less common than instances of not charging enough.<span> </span>(Surprising, isn’t it?)<span> </span>The consequences for pricing errors can be a burden;<span> </span>In addition to lost revenue by not charging a customer enough (which is usually remedied less often than when a customer is overcharged), stores who display high numbers of pricing errors are subject to substantial fines or administrative and judicial orders.</p> <p class="MsoNormal"><strong>State and local ordinances can remedy the problem.<span> </span></strong>Once you have realized that you were incorrectly charged for your purchase, there are actions you can take to get your money back.<span> </span>At the time the study was released, not all states participated in the NCWM Procedure (which sets forth a method of sampling and verification for proper pricing and register scans.)<span> </span>States like Michigan, however, take the role of consumer advocate one step further.<span> </span><a href="http://www.michigan.gov/ag/0,1607,7-164--134114--,00.html">Their remedy</a> (the Scanner Law) offers the following to overcharged customers: </p> <ul> <li>If a customer is charged more at the register than the item is marked, they may get back the difference plus 10 times the difference (up to $5) as a bonus.<span> </span>The bonus is only available if the purchase is completed; pricing errors that get corrected at the register and don’t result in overpayment are not eligible.</li> </ul> <ul> <li>Customers do not have to try to remedy the charges in store during their visit.<span> </span>Consumers have up to 30 days to ask for their money and bonus, and can do so with proper documentation via mail.<span> </span>The seller has two days to give your money back, and must do so in legal tender (cash), not gift certificates or store credit.</li> </ul> <ul> <li>If the seller refuses to pay the difference and the bonus, actual damages or $250 may be sought (whichever is greater) plus attorney’s fees up to $300.</li> </ul> <ul> <li> Multiple pricing errors on the same order will be honored by payment of the difference on all items, but only one bonus per order will be given.</li> </ul> <ul> <li>Certain items do not have to be marked.<span> </span>These can include vending machine products, items sold by weight that are not prepackaged, live animals, packages of 20 or fewer cigarettes, and greeting cards that have a readable coded price on the back of the card. </li> </ul> <p class="MsoNormal">(Note:<span> </span>This is an example of the Scanner Law in the state of Michigan.<span> </span>To get the full details of your own state or local jurisdiction, please contact your local attorney general.) </p> <p class="MsoNormal"><a href="http://blog.cleveland.com/business/2008/02/price_scanner_errors_are_fairl.html">This article from the Cleveland Plain Dealer</a> explains a recent audit for Ohio retailers and their rate of accuracy in pricing (a very interesting read.)<span> </span>While it reports that pricing errors are fairly uncommon, I may have to take issue.<span> </span>(For those of us who regularly watch sale pricing, request ad matches, and coupon, the rate of error increases dramatically.<span> </span>Plus, I think that we are more inclined to watch for pricing errors and would be more likely to catch one if it did occur.) </p> <p class="MsoNormal">Do you know the pricing law in your state?<span> </span>How have pricing errors affected you in terms of time and money?<span> </span>Has recent pricing errors caused you to change your shopping habits (i.e. choose the self-scanning register, shop online, etc.)?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> of <a href="http://www.wisebread.com/my-purchase-rang-up-wrong-could-the-law-be-on-my-side">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-overdraft-protection-racket-why-banks-want-you-to-overdraw-and-how-you-can-get-your-money-back">The Overdraft Protection Racket: Why Banks Want You To Overdraw, And How You Can Get Your Money Back.</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/will-a-dental-discount-plan-save-you-money">Will A Dental Discount Plan Save You Money?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-protect-elderly-loved-ones-from-financial-scams">How to Protect Elderly Loved Ones From Financial Scams</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/could-the-last-person-to-leave-america-please-turn-out-the-light">Could the last person to leave America please turn out the light.</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sleek-marketing-ploys-aimed-at-getting-more-of-your-grocery-money">5 Sleek Marketing Ploys Aimed at Getting More of Your Grocery Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Consumer Affairs checkout error law pricing Wed, 27 Aug 2008 13:36:53 +0000 Linsey Knerl 2371 at http://www.wisebread.com