Price Is Powerful <ul><li>Start with a widget you sell for $100 $100 </li></ul><ul><li>Let’s say your material cost is $65...
Price Is Powerful <ul><li>If you give 5% discount… Before 5% Off… </li></ul><ul><li>Now your $100 widget is $95 $100  $9...
Price Is Powerful <ul><li>We only have $3000, but we still want to go on the $3,500 cruise. </li></ul><ul><li>What would w...
Price is Powerful <ul><li>As a general rule… </li></ul><ul><li>If you want to drop price 1 percentage point </li></ul><ul>...
Price Is Powerful
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Price Is Powerful

Think before offering DISCOUNT...
Published on: Mar 4, 2016
Published in: Business      Travel      Technology      
Source: www.slideshare.net


Transcripts - Price Is Powerful

  • 1. Price Is Powerful <ul><li>Start with a widget you sell for $100 $100 </li></ul><ul><li>Let’s say your material cost is $65 $65 </li></ul><ul><li>Your gross profit is $35 </li></ul><ul><li>If you sell 100 widgets, you make a nice profit! $3500 </li></ul><ul><li>With $3500, you could take your family on a dream cruise! </li></ul><ul><li>What if we gave 5% in discount to drive more sales? </li></ul>
  • 2. Price Is Powerful <ul><li>If you give 5% discount… Before 5% Off… </li></ul><ul><li>Now your $100 widget is $95 $100  $95 </li></ul><ul><li>Your material cost hasn’t changed $65  $65 </li></ul><ul><li>Your gross profit is now only $30 $35  $30 </li></ul><ul><li>If you sell 100 units you have $3,500  $3,000 </li></ul>
  • 3. Price Is Powerful <ul><li>We only have $3000, but we still want to go on the $3,500 cruise. </li></ul><ul><li>What would we have to do to get $3,500 in profit again? How much more would we have to sell? </li></ul><ul><li>Before 5% Off… </li></ul><ul><li>Target profit $3500 $3500 </li></ul><ul><li>Profit per widget $35 $30 </li></ul><ul><li>Sales needed 100 117 </li></ul><ul><li>Wow! We have to sell 17% more widgets to generate the same profit… and we “only” gave up 5% in price! </li></ul>17% increase
  • 4. Price is Powerful <ul><li>As a general rule… </li></ul><ul><li>If you want to drop price 1 percentage point </li></ul><ul><li>Make sure you have a plan to increase volume 3 points </li></ul><ul><li>Before you offer more discount, ask yourself which is easier… 1 point of price or 3 points of volume? </li></ul>
  • 5. Price Is Powerful

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