Stop cutting prices when you have alternative options available. Bad things usually happen when you cut your margins. While you may increase your sales for the short term, you will unnecessarily reduce your profits for the long term.
The question you must ask yourself is, “What happens when you give your customer a lower price?” I make the assertion that many things happen and most of them are bad. Recognize that a 1 percent reduction is significant for a company operating at 3 percent gross margin. If you lower your price, that “one point” concession equates to a 33 percent reduction in company profits!
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Stop cutting prices when you have alternative options available. Bad things usually happen when you cut your margins. While you may increase your sales for the short term, you will unnecessarily reduce your profits for the long term.
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