Dangerous myth: Cut price and increase sales volume

When competition pressures you to cut price, don’t think you can maintain your profit level by increasing sales volume. “We’ll make it up by selling more. Lower price means more sales,” is almost always a fatal belief. Lowering price often fails to increase volume. And even if it does, trimming your profit margin on each sale usually puts you right on the edge of business failure.

If you lower your price, your competitors may go still lower. Soon your market is ‘racing to the bottom’ and nobody can make a profit. Don’t think you can beat the system. Let your competitors lower their prices. Keep your own sales up by selling harder. Show why you’re worth a fair price. Your business needs a decent profit to stay healthy.

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