If you’re in the business to make a profit you need to ensure you get paid for your passion and bring in enough money to cover your expenses.  This is something often referred to as the break even analysis. Click on this link to read the first article in full.  The second step to setting a successful price is to:

Understanding what your costs are , and what your competitors are charging for similar products will help you adequately and successfully price your products and services. Click on this link to read the second article in full. Now that you’re up to speed, lets jump right into the part 3:

Tiered pricing is the strategy of offering multiple price points for a consumer to consider.

This tactic is widely used in many businesses to offer different classes that often range from “Good, Better, or Best.” We can point to nearly any service or product and watch this tactic in action. Using the car industry as another great example, automotive companies typically have at least three standard editions for nearly every model. A basic model, followed by a mid-class, and lastly some type of luxury or top of the line/sport edition. This same tactic is also used by industry leading companies such as Apple and their iPhone, which comes in three different models (16 GB, 63 GB, and 128GB)

A recent article written by Eilene Zimmerman of the NY Times provides us with the following Quick Tip:

Similar to cross-selling, think of complementary products or services you can add to increase your revenues. It’s no coincidence stores pack items that complement your purchase, as well as last minute items right at the register. This method allows you to add cost effective products/services to your customer while effectively increasing your bottom line.

Related Content: What You Need To Know About Pricing 

Creating different price points has additional benefits such as:

• Attract new customers – Introduces new consumers to your products at a lower cost/lower risk. If they like your product/service, they may recommend to others and conduct repeat purchases.
• Build brand awareness- Selling items at a lower price helps the consumer rate your work, and decide if your company is deserving of their higher priced purchases. Setting lower price points may also help build your reputation and create brand awareness.
• Attract different classes- Some consumers may only be interested in the higher tiered products. By offering a higher-tier line of products you may attract a new audience.

Incorporating these simple steps, one at a time, will help you achieve a success by not only allowing your products and services to sell, but by netting you high profits with ever sale made.

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Lastly, if you have a question you’d like to ask, hit me up on Twitter, handle is @AJRos02 and use the hashtag #AskAJ I’ll reply back and/or write an article answering your questions.