Reduce Price to Improve Revenues and Margins


We reduce prices to improve sales volumes and their resulting margins:

  • We
    improve sales volumes by retaining customers who might have left for lower prices offered by other competitors and by gaining new customer volume from customers attracted by our unique low competitive prices.

  • We
    improve our margins due to the contribution margins of the customer purchases we saved with our lower price, or from the sales we gained with the lower competitive price. In both cases, the cash contribution we receive on sales to the saved or gained customers, increases the company’s cash and lowers its total cost per unit. We may also increase our revenues or reduce our costs by rewarding customers for actions they take to improve our margins.

Accordingly, we have one of
three objectives when we lower a price:

1. Attract customers by encouraging them to make an initial or follow-on purchase, thus increasing the company's revenues. This objective encompasses the following sub-objectives:

2. Retain customers who would purchase from a competitor were it not for the company's lower prices. This objective encompasses the following sub-objectives:

3. Reward customers to encourage their actions that increase the company's revenues or reduce its costs. This objective encompasses the following sub-objectives:

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