Pricing Power, and How You Can Profit From It

How successful is your company in increasing prices without losing volume to competitors? That depends on your pricing power. This is part 2 of our Pricing Basics series.

In an ideal world, your company sells a unique or patent protected product, and there are few or no other players in the market. Then your pricing power is likely to be substantial. You can increase your prices without major risk of losing business to a competitor. However, for most companies, this is not the case, and pricing power is much more difficult to achieve.

What is pricing power?

The good news is that pricing power can be achieved, and low competition or market shortages are not the only criteria. When talking about pricing power, what actually is being referred to is, a company’s ability to get the price it deserves for the value it delivers. It has additional facets, for example the ability to transfer cost increases into higher prices, to…