I have a price range for my stories.
I know how much I can increase
or decrease the selling price
before the pricing change swings sales.
Knowing your price elasticity
(how the number of units sold
increases/decreases
with price changes)
is important.
It determines profitability
and often influences
what improvements
you can add to the product.
As Leah Munsey,
Motley head manager,
explains about her coffee business
“Ethically sourced products are
on the expensive side.
But our coffee is a product
that our regulars are not willing to give up
unless the prices are outrageously high.
It is, more or less, inelastic,
meaning that the demand won’t change very much
when the price changes.
Other products we sell, however,
are more elastic.
Our Kombucha is on the expensive side,
and if we increase the price at all,
some customers would choose
to purchase another drink.”
Know your product’s price elasticity.