OK, so this is the answer to my question HERE
(did you see the question? If not, have a look at it before reading this answer)
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The person who will pay | Your cost is £80, so your profit is | If you charge £100 you get | If you charge £120 you get | If you charge £150 you get | If you charge £200 you get |
£100 | 20 | 20 | 0 | 0 | 0 |
£120 | 40 | 20 | 40 | 0 | 0 |
£150 | 70 | 20 | 40 | 70 | 0 |
£200 | 120 | 20 | 40 | 70 | 120 |
=80 | = £120 | = £140 | = £120 |
The person who will pay | If your cost is £90, your profit is: | If you charge £100 you get | If you charge £120 you get | If you charge £150 you get | If you charge £200 you get |
£100 | 10 | 10 | 0 | 0 | 0 |
£120 | 30 | 10 | 30 | 0 | 0 |
£150 | 60 | 10 | 30 | 60 | 0 |
£200 | 110 | 10 | 30 | 60 | 110 |
=40 | = £90 | = £120 | = £110 |
The person who will pay | If your cost is £70, your profit is: | If you charge £100 you get | If you charge £120 you get | If you charge £150 you get | If you charge £200 you get |
£100 | 30 | 30 | 0 | 0 | 0 |
£120 | 50 | 30 | 50 | 0 | 0 |
£150 | 80 | 30 | 50 | 80 | 0 |
£200 | 130 | 30 | 50 | 80 | 130 |
=120 | = £150 | = £160 | = £130 |
In all of these cases the best strategy is the one where you lose 50% of your customers on price, making a good margin from the other 50%. And remember that customers who are not so bothered about price are usually better customers as well – they understand quality. The ones who are obsessed about price are often higher maintenance as well.
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