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How to Sell at Higher Margins than Your Competitors

Posted On - 11/08/2017 08:58:17

Want to know how to sell at higher margins?The toughest challenge small businesses face is the fight against low priced competition. How you respond defines whether you succeed or fail. But isn't it just economics - just compete and lower prices? The answer is it isn't.

Sure, lowering prices can attract volume. But the impact isn't what you think.

In fact it's pretty dangerous.

There is another way. A way that could mean selling less but making more money. If you'd like to find out more and how to sell at higher margins read on…

All is not what it seems

2016 saw record business starts in the UK. More than 650,000 were formed. So more pressure to win customers. More pressure on pricing. But is this a problem for you? Because while over 90% survive their first year, 50% have died by their 5th.

The most common reason for business failure is cash-flow. And in a micro-business that's pretty much down to one thing - price. You see anyone can go into business and start out with rock bottom prices to get volume. But being a business owner doesn't make you commercially astute. It certainly doesn't mean you can't go broke. It's not how much you can do that matters it's how much you can make. Business is a matter of margin not volume. And many of your competitors aren't competing at all. They're just slowly going broke.

Everyone's a price-buyer

Not true. Here's why.

Are you wearing the cheapest possible clothes you could buy? Driving the cheapest car? It's extremely unlike. Because while it's true price matters for the majority it's also true other factors count too.

If everyone were a price-buyer everything would be sold – online and off - through a tiny number of sellers. Plus there'd be no reason for sales people – you can read a price for yourself.

The truth is no-one wants to waste their money. So when we buy we want to know we're not getting ripped off. Just because a customer comments on or objects bluntly to a price doesn't mean it's wrong or they're a price-buyer.

Yes their words may be harsh – their expressions poor. But how do you respond when you're confronted by something you don't understand? They don't get if what they're buying's worth it. All you need do is explain why it is.

Price is bigger in your mind

Selling is also game of chicken. While customers need to understand value they'll not turn down a snitch. And they know you'd rather sell than not so many test your resolve. What's to lose chancing you'll crack and give them a better deal?

You can't just say "No" or flatly refuse to acknowledge a price objection - that's rude. Customers know this so you're forced into acting along. There's ritual to selling plus ways of playing the game. And like any athlete a positive mind-set is essential to win.

Don't let price rule your mind – it's not what's most important. Concentrate on selling: helping customers understand their options, the value in buying them from you, and the different prices.

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