Impact Pricing

This one is the Jack of Hearts from the Impact Pricing card deck.  If you have the ability to raise your prices and you can still sell the same or just slightly fewer products, you are almost guaranteed to make much more profit. There are many studies out there that show a 1% increase in pricing can yield a 10% improvement in profitability. Now, how does that make sense? It makes sense because if you assume for a second that you have 10% gross margin on your product. So, I'm going to throw some numbers at you here. Assume that it costs, you're going to sell something for $100. It costs you $90 to make it. So, you have 10% gross margin  and you're making $10 in profit on that product, or on that sale. If you can raise your price 1%, so we go from a 100 to 101, we just raised our profit from 10 to 11. And that's because raising price has zero impact on our costs. Every dollar we make from the price increase goes directly to the bottom line. So, if we went from 100 to 101, we increased price by 1%. We took our p