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Selling goods or services at cost? It seems like the silliest thing to do, because everyone wants to make money. I would recommend not to be so categorical at this point and to take a broader view. In certain situations, it does pay to sell goods or services at cost.
Don't believe it?
Here are some examples:
✔ For a new entrant to the market, it often really pays to work at cost or with a very low mark-up. This is a win-win situation, as the newcomer can learn from real clients and build up knowledge, while the clients get the services they need at a low cost.
✔ The low price can also be offered by start-ups who want to build up a basket of customers and increase their visibility. Naturally, a new company that is not yet known to anyone does not inspire confidence, so nobody will want to pay much. However, if there is an opportunity to try out the services at a low cost, it is a great way to prove your worth and raise your prices over time.
✔ A new product, just like a new business, does not inspire confidence and would be very difficult to sell at a high price, and you would have to spend exorbitant amounts of money on advertising, which is unlikely to be worthwhile. In this case, it really pays to start by selling a product that is completely new on the market for a nominal amount in order to win over customers, prove its value and gain trust.
✔ Not only newcomers can charge a low mark-up, but also giant businesses that have a huge flow of customers and essentially live off that flow. Notice how people sweep the shelves on Black Fridays or other sales. Yes, the business will sell cheaper, but the lower prices will significantly increase the flow of shoppers, so it has nothing to lose.
Before booking a consultation with a specialist, please write your question.
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