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1% Higher Prices gives 11% Profit Improvement

December 4, 2018 By BMN

A consultant study across 1,200 major businesses found that a 1-2% increase in price, assuming demand remained constant, on average would have increased the company’s profit by 11%. Clearly, this could be a quick boost to your company’s profitability.

For a quick example of the impact of a price change, consider a business turning over $500,000 per year.  Let us further assume that it makes a 5% profit on that, which gives it a profit of $25,000. If it increased its price by 1%, and assuming demand remained constant, that would lead to an extra $5,000 in income. This extra $5,000 over the original $25,000 is a 20% improvement.

Read more here…  (link below)

https://mailchi.mp/26a995340a24/mv7dut51vv

Recommended listening by our mentor Scott Williams.

 

Filed Under: Small Business News & Tips Tagged With: Pricing, Profit

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