Pricing in 2022

Some business owners can be hesitant or even scared when it comes to increasing their pricing. The ground for this hesitation usually lies in the fact that business owners are afraid of losing customers or a market share, letting competitors outrun you. Whatever the reason, now is the time to put the excuses aside and rethink your pricing thoroughly.

Both the inflation that is likely to increase in foreseeable future and the supply chain challenges that the companies faced in 2022 have left a serious imprint, that’s why it is crucial to learn how to adjust to keep up. Here are the things to consider when rethinking your pricing in 2022:

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Your cost of goods in relation to your pricing

First and foremost, keep in mind the importance of considering the cost of goods in relation to your pricing. Every $1 increase in the cost of goods, means at least $1 lost on your profit. If there is a rise in the rates of the suppliers and manufacturers, don’t hesitate to adjust your prices accordingly. Regularly review your pricing and negotiate with the vendors to keep your prices low. For example, bulk purchasing is an option to do so. If not possible, the best solution will be the price increase.

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Your competition

Another thing to take into consideration is your competition. Do not forget to keep an eye on your competitors regularly and track their prices. This doesn’t mean that you should charge lower than your competitors, if you are creating value and have a superior product, don't be afraid to charge accordingly.

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Your loyal customers

Some business owners are hesitant to raise prices because they are afraid of losing their loyal customers. But the reality of the situation is that most consumers understand that costs change over time. The prices for almost every product have increased due to the inflation so it makes sense to make adjustments in your pricing as well. As long as you are creating value in the minds of your consumer, a price increase shouldn't be a huge concern for your business.

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Summary

Price increase is a topical issue of many business owners nowadays. But if done correctly (with taking into consideration all the possible obstacles and adjustments), your business can grow and expand. On the contrary, the lack of adjustments in pricing can lead to stagnation. So, don’t be afraid to review your pricing strategy to keep your business on the right track.

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