Don’t you hate it when you’ve worked so hard to influence a prospect to buy from you and they start putting demands on you to reduce your price?
Any attack on your gross margin to reduce your price is an attack on your bottom line. That’s because your overheads don’t change and the cost of acquiring your goods and services don’t change.
Anyone can sell their products or services cheaply enough, it doesn’t take a lot of skill. It takes a real professional to hold your margins in the face of pressure to discount your prices.
Let’s look at the impact of discounting.
The impact of discounting
The words margin and markup are often used interchangeably. Your markup is the amount or percentage you add to the cost of acquiring your products or services which in turn determines your retail or sale price. For example:
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