Product Pricing

Different pricing tactics


Offering specially reduced prices can be a powerful tool. This could be a clearance discount to sell old stock, or you could offer bulk discounts to encourage larger orders. You should be able to make these more profitable through lower costs.

But be careful. If you discount too much, customers may question your full-rate pricing or see you as a cheap option, making it difficult to charge full-rate prices in the future.

Odd value pricing

Using the retailer’s tactic of selling products for £9.99 instead of £10 can be useful if price is an essential part of customers’ buying decisions. It can help to show you’ve discounted every penny you can.

Selling one item at £2.98 instead of £3 may not seem much, but once the customer buys multiple items at the discounted price, they would save a decent amount.

Loss leader

This involves selling a product at a very low price purely to win new customers. You may include some products priced at cost in your range for this purpose, or you can offer lower prices to new customers, reverting later to normal prices. (see also our article on Customers, particularly the page regarding How do I get new customers?)


If you have a unique product or service, you can sell it at a high price. This is known as skimming – but you need to be sure that what you are selling is unique. Otherwise you may just price yourself out of the market if there is credible competition.


This is the opposite of skimming – starting at a low price and gaining market share before competitors catch up with you. Once you have a loyal customer base, you should be able to find ways to raise prices later.

This Product Pricing business advice article is Crown Copyright © 2004-2013

1 2 3 4 5 6 7

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>