Price Strategy: How much should I charge?

In the world of business, setting the right price for your products or services is crucial. It is a delicate balancing act between maximizing your profit margin and optimizing your total revenue. An ancient Chinese proverb says that smaller margin brings much more sales (薄利多销), while another states that earning 10 thousand times your cost (一本万利). These two represents two drastically different business goals. One is to maximize the revenue, the other is to maximize the profit. Where is the optimal point between total revenue and profit margin? How much should you price your product or charge your clients for your service? Let's dive into the key factors to consider when developing your price strategy. What are Profit Margin and Total Revenue Before we discuss strategy, let's clarify these two important concepts: Profit Margin: Profit Margin is the percentage of sales that turns into profit after all costs are accounted for. It is literally how much profit you make per sale....