Wednesday, February 04, 2009

Increase Your Profits With No Extra Work

Well, almost no extra work. The trick to more profits is to increase your price, even slightly. Depending on your cost structure, a small price increase can mean a huge increase in profits because the entire increase goes to the bottom line. As an example, if you were selling a product for $40, and your product cost and all other expenses (utilities, payroll, delivery, insurance, web hosting, etc.) totalled $35, you would only need to increase your price by $2 (5%) to increase your net profit by 40%!

Panic

I know. I know. The first thing that comes to mind is, “I can't increase my prices in these tough times or I'll be out of business in a week!” This is simply not true.

A recent study showed that given a 15% price increase, many vendors will see an increase in sales - that’s right, an increase in sales. Most will see an increase in profits. Some of course will see a decrease in sales. Aha you say, “That'll be me.” Well, maybe, but keep this in mind, no one who increased their price by 15% experienced a decrease in profits.

You can read the rest of the article at: The Great Ideazine.

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