How To Charge Less And Make More Money

On the other hand, lower prices are always able to attract the attention of the consumers. So, the strategy that one has to master is how to make more money even by charging less. Many people are not willing to cut down the price as they feel that this way they will be losing out on a part of the profit.

But suppose because of the high price your product remains unsold. Then you don’t earn anything at all. Whereas a lesser price could have earned you at least some profit. And this way, if you attract more customers with a lower price, your cumulative profit will soon be higher than what you could have earned with higher prices. This is an interesting way of making profit, where a slight decrease in the marginal revenue can actually result in a considerable increase in the total revenue.

But when you apply this policy of earning money, you must make sure that you do not compromise on the quality of the product. Lowering the price and at the same time also lowering the quality of the product will lead you no where! So maintain the standard and just reduce the marginal profit that you are to earn.

An effective way of doing this is to reduce the cost of production. The cost of investment incurred is fixed so there is hardly anything that you can do to reduce it, but the variable cost of production can be altered to some extent. If you can reduce the production cost, the price of the product will automatically come down.

Shedding excess labor can help you to reduce the labor cost of production. In the same way, you can also reduce the cost of other factors of production. Moreover, manufacturing your product in a bulk instead of a few at a time can help in reducing the price of the product. This can be quite useful if you can advertise your product properly, emphasizing on how inexpensive it is, and create a wide market for it.

To sum up, charging less money for the product you want to sell is the best way to extend the market for the product and naturally it is also the best way to increase your business in a big way!