Mention imaginative pricing to gain

Mention imaginative pricing to gain more profit, and most people think of charging more for "extras." I got a new set of glasses this week. The lenses only cost $59, but they tried hard to sell me an "anti-glare" coating for another $50. Based on what I know about coatings, this probably costs $0.10 to apply. I'm on to that kind of so-called innovative pricing. No, thank you!

Lower prices instinctively feel to most people like a way to shave their profit margins, and drown in the resulting profit squeeze. While you certainly need to be careful whenever you lower prices, help can come in the form of price adjustments that reduce your costs at the same time. Let's explore how to find these cost-reducing price adjustments.

You can also use prices as a carrot or a stick to influence which offerings your customers and end consumers will choose. Whether you use the carrot or the stick in a particular circumstance depends, in part, on your fully analyzed current and potential costs.

Adding volume has widely differing impacts on average and marginal costs across a variety of offerings. This is true in the short term and in the long term. You should consider both time perspectives and dimensions of costs.