Your Internet Home Based Small Business – Should You Compete For Pricing?

The Internet home based small business market is very competitive. When you go online to market your product, there are many businesses that will try to undercut your prices. Ultimately there will come a time with your Internet home based small business when you must determine whether you should compete based on the price of your product or not.

Consider these strategies before you make a decision:

1. Is your primary goal to make profit, make the sale or keep the customer? Many Internet businesses have an inexpensive front end product. The strategy being to get their customers onto their site in the hopes that they can funnel them into buying higher priced products later on.

If you sell a report for seven dollars and your competition sells it for five dollars you might want to meet their price. A two dollar price drop is not worth losing the customer. These customers could lead to a higher profit on future sales.

2. What is your production overhead? If you are selling information with your home based small business, you do not have a lot of costs involved in product creation. Your prices will need to be based, to a certain extent, on your cost of production.

Could you cut your prices to bring in more customers? People are always looking for a deal. When you go to choose your price point, you need to take a hard look at your production expense.

3. What are the ongoing costs associated with your product? You have to promote your product. If you can become proficient with free marketing methods, then this will give you more maneuvering room with your price.

Do not forget to factor in your time. Time really is money and you should get paid for the work you do. Calculate your hourly rate to determine how much money you need to make to create a profit.

4. Can you add more value to your product instead of dropping the price? Can you offer bonuses or contests? Many Internet marketers include bonuses to entice customers to buy.

Another strategy is to enhance the product itself in some way. This increases the value of your product to the consumer.

Make sure that the bonus which you offer is unique. There are a lot of online business people offering them so you need to be creative in order to drive traffic to your site

Whether you should compete strictly on price with your Internet home based small business comes down to your niche and products. Keep in mind, before you start to cut prices, you still need to be profitable with your business.

By: John F Baril

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