Frequent discounting

This is just something to make you think.

There are three types of pricing philosophies.

1) Have your regular price and occasionally run sales.

This is the traditional model for most large retailers. Then every now and then, they run a big sale. The problem many retailers see is that the regular customers after awhile learn to wait until the sale happens.

2) Make your prices a bit cheaper and run with it all year.

Many discount shops use this approach. One problem I see here is that it is very hard to be the cheapest all the time.

3) Flexible which raise your prices when the market is high and lower it when it is low.

An example would be many of our customers when supermarkets are open lower their cigarette prices and when the supermarkets closes they raise them. As they can get more after hours.

So which model is the best, obviously there is not one answer that fits all, but a study in the US showed that generally (1) is the best. Run with your regular prices and occasionally run a sale.

Have a read here.