7 ways to increase your earnings

To begin with, do you think your business has a problem with prices? Perhaps it has more to do with the combination of products or services that you are offering to the public. This is because the best pricing strategies involve making adjustments to your offers.

Thus, rather than bothering your customers by raising prices, you could present them with a new "premium" version of an item, which would consequently be sold at a higher price. Or, offer it at cost but include it in a bundle of add-on products that you can sell at higher margins. Both strategies appeal to basic attributes of human nature: some people will always buy the best, and someone who acquires one thing is more likely to take something else.

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Here are seven ways you could increase your profit margins by experimenting with your presentations:

1. Make a bargain price offer. 

The aim is to attract more price-conscious consumers, that is, people who are looking for a bargain and still worth it (for you) because you can squeeze a small profit out of each product. Here's an old-fashioned business idea: if you were traveling third class on early 19th-century trains, you had to wear a raincoat since the carriages had no roof.

It should be noted that this was not because the rail service could not afford it. Rather, they put you in that situation because then they could make a profit by providing the service to you. However, they also wanted the experience to be tough enough that well-to-do people would never travel third class.

2. Well, the best, the best. 

When some products are substituted for others, the classic strategy is: "good, better, better." If you take a long flight, you can choose between economy, business and first class. On the other hand, a grocery store may sell generic Cheerios, authentic General Mills Cheerios, and also a high-end organic Cheerios-like cereal.

The idea is to continue attracting customers who are hunting for an offer, but have a much higher margin in the price of premium products or services, since the person who wants to travel first class or eat sustainably prepared cereal does not you are going to worry too much about the price. And when this factor is not so important, people will choose "the best" product.

3. Find a hook. 

McDonald’s is able to sell a double cheeseburger at a loss because it knows that consumers will surely buy fries and sodas (which are more profitable) at the same time. The idea is to use the product that works as a hook to get customers through the door and, once they are inside, sell them food at higher margins for the company.

4. Giving away a durable item to sell consumables. 

Gillette has implemented this strategy very well with razors. You can even send free rakes by mail, knowing they will make a profit from the sale of the corresponding replacement cartridges. So the advice is to give away a durable product that the consumer will use practically forever, and then make money selling the disposable items they will require.

5. Add accessories. 

Charge higher margins for accessories that go with a certain product. For example, a person who purchases a bicycle may want a helmet, knee pads, and a bell. So win over consumers by offering them a main product on which to base their purchase decision (such as the bike) and then “tempt” them to purchase accessories that have a higher margin (for you).

6. Offer optional products. 

A meal on board or a bag tucked in the overhead compartment used to be part of the price of a plane ticket. Now passengers have to pay extra for all that. And it is that the airlines realized that the decisive element is the price of the ticket itself. So once they have you captive on the plane, they can sell you a sandwich at a high price.

The idea is to separate products and services from the offer to turn them into complements (often necessary).

7. Pack. 

Rather than setting additional prices based on creating higher margin product bundles around the item that motivates the decision, it is about increasing sales volume by offering packaged items to get people to buy more. For example, the intention of the TriplePlay package is to increase the number of television service users who also choose to hire telephone and cable Internet.

There could even be someone who acquired all three anyway; however, it most likely would not do it without the bundle offer in between.