Happy Living
Popular Podcasts
Total Podcast Downloads
Through Sept 30, 2015
Member Area
  Member Login  
The Right
Selling Price

Written Sunday 01/04/09 by Joe Rossini

In today’s weak economic conditions, nothing can be more important for any business than to have the “RIGHT SELIING PRICE! This mystical number for a product or service can make or break a company. In this week’s lesson we will discuss this mystical topic.

Think back to the late 1990’s and the tech stock mania. Many internet companies had business plans to sell their products to consumers at cost or below. They didn’t plan on making a dime in profit from merchandise sales. Their theory was that if they could draw enough people to their web site (eyeballs), they will be able to convince advertisers to pay a premium to for a banner ad on their site. Their plan was to grow traffic to their site with the hope of creating a valuable asset for a larger company to gobble them up at a hefty return on their time and resources.

Some businesses actually made this happen. Mark Cuban was one benefactor of this theory. He became a billionaire by suckering Yahoo to buy his internet business named for billions in Yahoo stock; which he in turn immediately sold before the Yahoo stock price cratered.

Many other retail businesses of the 90’s that used to be called catalogue companies became internet retail pioneers. They sold products cheaper than big box stores and at the time did not charge sales tax. Keep in mind that these companies had the benefit of not operating expensive retail buildings or employing thousands of individuals on their payroll. They only employed a few people and provided LITTLE or NO SERVICE. Their website would only be hot until someone else offered the same exact item for 5% less. Then, customers who were buying for price only, would probably drift away. Building your business around cheap pricing rarely works for the long term.

Thus in the case of the tech bubble that burst in the early part of this century, everyone knows what happened. Most of the participants disappeared forever. They just couldn’t turn a profit! One thing that must always be remembered is that IN THE LONG-RUN, economic law wins out. Games can be played that run contrary with economic laws. The games can last for years and even decades, but in the long-run, economic law re-establishes itself and the truth is revealed.

In the case of the stock market boom, the truth was revealed rather quickly. Warren Buffett said something that is very relevant to this topic. He said, “It’s only when the tide goes out that you learn who’s been swimming naked.” Even though many of those tech companies were valued at billions of dollars, economic law brought valuations back to reality.

How do you spot when economic laws are being toyed with? There are many catch words to look out for, and here are a few. First you will hear calls that we are in a “new economy.” Then phrases like “the old laws of economics don’t apply anymore,” or “technology has changed everything.” The bottom line is that a company will either be profitable or it will not.

Let’s say that you want to start your own business. Regardless of what business you are in, I believe you MUST BUILD VALUE into your pricing structure for your products and services. Your FIRST GOAL should be to satisfy the needs of your customers. Your pricing strategy must be well planned. You need to EARN ENOUGH PROFIT to cover expenses, compensate yourself, your employees and have excess profits earmarked for future growth initiatives.

In the end, it is consumers and clients who set the prices based on how much they demand your product or service. Contrary to popular belief, it is NOT suppliers and businessmen who are in the driver’s seat. It is the consumers and clients who have the ultimate economic power. Their power lies in their ability is to choose someone else to do business with. That’s right! Businessmen and suppliers can pick whatever prices they wish. A gas station owner can put a sign up that says $10 per gallon. In fact, he can put one up that says $10,000 per gallon. It is his right to do so. The gas is, after all, his property. He owns it. But it is the consumer that holds the cards. The consumer can REFUSE to exchange his money for that gasoline.

If you are in business, you never want to wake up one day and be like the BIG THREE carmakers who can’t figure out why no one is buying their products. You have to wonder why they weren’t listening to their customers and making the necessary changes over the last few decades. Make sure that you are listening, because your customers hold the trump card: Their right to refuse to do business with you regardless of your price is a powerful and deadly weapon.

Email a friend......E-Mail This Article To A Friend Printer Friendly Version......Print This Article
Copyright ©2015 eHappyLife, LLC - All Rights Reserved
Articles may not be published without the consent of the Author

Learning Life's Lessons Master Archives
The Real Deal Relationships | Parents Should Be Special | Children Learn By Example
Make Time For Your Kids | Don't Wait To Share | Peers and Friends Come and Go
What Can Teams Teach Us? | Who's Telling The Truth?
Should You Fight To Be Right? | Exceeding Job Expectations
Relationships with Stats and Numbers | Using Personal Computers
The Road To Improvement | Doing The Do-able | Moving The Move-able
Doing What You Say | The Greatest Generation | You Can Count On Me
Take More Pride In 2005 | Financial Independence Anyone? | I Just Didn’t Have Time!
Avoid Assuming Anything! | Never Take Anything For Granted!
The Power Of Fan Loyalty! | Dangers of Resisting Change! | Life's Peaks And Valleys
The Process Of Reinvention | Wisdom | Intuition and Instincts | A Little Bit At A Time
Why Speed Counts | The 80-20 Principle | Showing Your Appreciation
Think, Focus, And Finish | Learning From Others | The True Value Of Time
A Mother's Day Tribute | Writing Helps To Learn And Share | Are You Really Listening?
Memorial Day Tribute | Changing Is Difficult | Bubbles, Balance & Boredom!
A Perspective On Fatherhood | Why Courtesy Counts? | 1776 And Independence Day
Tools In The Right Hands | Boomers And Retirement | Playing The Games Of Life
How Tech Savvy Are You? | Rhythm And Momentum | Consistency Counts!
The Power Of Saying THANK YOU! | Fix Small Problems Quickly!
A Tribute To Labor Day | Scarcity And Value | College Footbal Lessons
The Most Important Clients | Develop A Solutions Mindset
Lifelong Learning Is Essential | A Game Of Mistakes | Respecting Rules And Laws
The Concept Of Systems | Strive To Make Others Happy | Hire Slow, And Fire Fast
A Lesson About Loyalty | Following-Up Reaps Rewards | Worry Less And Enjoy More
Live Today And Plan For Tomorrow | Something For Nothing review
Some Opinions On Advice | Resolutions Of Health & Peace
Where Dishonesty Can Lead Us | Living Each Day With Purpose | The Work Ethic
Avoiding Misinterpretations | Super Bowl And Our Culture
Start a Lifetime Word Course | Silence Is Golden Rules | A Perspective On Timelines
Invest In What You Know | Setting Priorities Is A Skill | The Power Of Prevention
Finding Relevance When You Retire | Benefit From Daylight Savings
Strive For What You Become | Choosing Price Or Quality | Understanding Your Inflation
Pursuing A Brighter Future | Creating Value And Wealth | The Ultimate Professional
Always Do Your Best | Choose Your Friends Wisely | Thoughts For The Class Of 2006
The Long Road To Showtime | In Memory Of James Rossini
Benefits Of Being A Contrarian | Innovate And Specialize Now!
Invest Your Energy Wisely! | A Hundred Weeks & Counting!
Developing A Sense Of Urgency | Does Fidelity Really Matter?
Does Brand Loyalty Still Matter? | A Perspective On Free Time
The Reality Of Competition | Why The Best Seek Education
Spend And Borrow Money Wisely | Want Your Clients To Love You?
Brainstorming Really Works | Losing Your Best Furry Friend
Be A Student Of Your Body | Drive Safe To Stay Alive | The Relevance Of Polls
The Power Of Paying Promtly | Learning Quickly From Mentors
Singing Happy Birthday Is Powerful | Always Respect Your Competitors
Gambling Is A Bad Bet | Develop An Investment Mindset
Till Respect Do Us Part | Navigating Through Holiday Shopping
Always Field Your Best Team | The Language Of Love
Forget The Ugly Past And Move On | You Are What You Think
The Internet Has Changed Our Lives | Dot The i's And Cross The t's
Service Is Not A Favor | Success + Overwhelm Equals Complacency
Why Real Deal Relationships Expire | The Ugly Costs of Misunderstandings
Taking Giant Steps And Leaps Of Faith | Searching For A Happy Life
Why Can't The Honeymoon Last? | Creating More Serenity Now
Who's Responsible For Irresponsibility? | How To Destroy Team Morale
The Gifts My Parents Gave Me | Turning Dreams And Visions Into Reality
Keep Clean, Organized Surroundings | Return Communications Like A Pro
Start Saving As Early As Possible | In Memory Of Rose Rossini
Bouncing Back From Adversity | The Early Bird Catches The Worm
How’s Your Name Brand Doing? | My One And Only Lesson On Politics
It’s Father’s Day Once Again | A Trifecta Of Benefits
Mirrors Can Bring Pain Or Pleasure | Gadgets To Improve Your Attitude
Selling Your Conscience For A Buck | Dealing With Daily Obstacles
What Really Matters In Your Life? | What Really Matters In Your Life?
A Perfect Financial Storm Coming? | Avoid Distraction Overload
Turning Passion Into Profit | Disruptive Change Will Rule The Future
Buy Tools Before You Need Them | Pessimism Or Optimism? Your Choice!
Avoid Playing The Blame Game | The Development Of Instincts
Keep It Simple, Efficient & Consistent | Understanding The Workaholic Syndrome
Relationships Are What We Live For | We May Need A Push To Get Started
The Power Of A Positive Attitude | The Emotion Of Disgust
For Boomers And Caring Citizens | The Importance Of Focusing
Always Keep Your Promises | The Power Of Energy
The Power Of Persistence | Remove The Shackles Of Indifference
Become The CEO Of Your Life | A Thirst For Knowledge in 2008
Enjoy Being More Decisive | What Happened To Accountability?
Make Health A Top Priority In 2008 | Less Talk, More Action!
Understanding Team Dynamics | Excuses Benefit No One
Life Is A Balancing Act | Is Happiness Eluding You?
How Do You Define Success? | Time Is Money
The Necessity Of Flexibility | We Are All Salespeople
Being Accountable To Yourself | Dealing With Disappointment
Why Excess Adjusts The Marketplace | Recognizing Value And Importance
Don’t Let Worry Drain Your Energy | That's Life!
Build Self Esteem Every Day | Avoid The School Of Hard Knocks
Praise More And Criticize Less | How To Increase Your Business Value
Why You Should Serve Customers Better | Don't Let Small Doubts Stop You!
Numbers, Stats And Market Forces | Always Strive For Excellence
Discipline Is Necessary For Progress | Why Service Can Really Stink
Reduce The Friction In Your Business | Avoid Being Indecisive
Everything You Do In Life Counts! | Time Is Our Most Precious Asset
High Energy Leadership | Anticipating And Preparing For Change
You Are Responsible For Your Choices | Resolve Means "I WILL"
Leading And Learning Communication Skills | Be A Member Of The 5% Club
Leading With An Unshakable Character | Defining Wealth And Value
Who Can You Really Trust? | The Rewards Of Growth
A Two Step Cure For Procrastination | Desire Is A Powerful Emotion
What Makes Customers Buy? | You Must Provide Value To Compete
Honest Self Appraisal | The Fear Of Failure | Take A Deep Breath
Are You A Master Or Victim Of Change? | Act Like A Fiduciary To Restore Trust
Which Will It Be: Inflation Or Deflation? | The Right Selling Price
Why People Don't Set Goals | Take Control Of Your Time
How To Invest Better Using Google

To view Polls by Questions Click Here

To view Polls by Topic Click Here

To view Personal Articles Index Click Here

After 15 years in existance, is about to receive a major UPGRADE for Computers, Tablets and Mobile Devices
Today's Featured Lesson is: The Power Of Saying THANK YOU!
232 Lessons Presented
Click below to listen to Wisdom

Build Your Vocabulary
Download our FREE iPhone & Android APP Now!