Tag Archives: Pricing

Using Microeconomics to Maximize Revenue

As a small business, you have to consider the concept of microeconomics when pricing your product or service to maximize revenue. By definition, microeconomics studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources (i.e., money). Contrast microeconomics with macroeconomics. Macroeconomics considers the the sum of all economic activity such as dealing with the [...]

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Four Business Lessons From The Sturgis Motorcycle Rally

As I write this post, I have just returned from a motorcycle rally in the Black Hills of South Dakota. This rally is often referred to as just “Sturgis.” As always, the trip was full of lessons for entrepreneurs. Now, you may be surprised by that, but stick with me and you'll discover these lessons too. When I mention Sturgis to [...]

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Availability of Financing

Do you offer your customers a convenient way to purchase from you? Is it possible to have them pay in little chunks rather than one big chunk? For example, 12 easy payments of $12 each ($144) sound a whole lot more affordable than one large payment of $130. This perception remains even though it is more cost effective to pay [...]

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The Power of Free Samples

When you have a new product or service, your customers will likely never take the risk of purchasing it unless you offer them a free sample first. Sometimes the free sample may come in the form of a gift from another person. I never considered getting a massage until I received one as a gift. I always [...]

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Free as a Business Model

When you have a free product or service with high amounts of traffic, platform advertisers become interested in subsidizing your free product or service by paying you a fee to share their advertisements. Free products generate high platform traffic and increase the attractiveness of your platform to advertisers. Freemium users get basic functionality for free. However, a few paying people who [...]

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Understanding Pricing Mechanisms

Pricing mechanisms come in two principal forms: fixed and dynamic. Fixed pricing has predefined prices based on a static set of variables while dynamic pricing changes prices based on market conditions. Price mechanisms can affect both your revenue stream as well as your costs. When it comes to defining a business's pricing mechanism, I find it helpful to consider a [...]

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How to Price Your Hobby and Craft Projects

Turning a hobby or a craft into a business often has a fatal flaw with scalability. Say you have a business that produces 100 units that you plan sell for $25 and it costs you $20 to produce it. As a small scale business, you are happy with a $5 profit on each piece since you produce, pack, and ship [...]

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