The Problem With Underselling
About 10 years ago, I had a home based craft business … sewing and selling hats and skirts.
I made a lot of mistakes in that business, but I think perhaps the biggest one was underpricing. I sold hats for $10 to $15 and skirts for $5- $15. Even a decade ago, my prices were considered dirt cheap.
However, because of the competition, I felt I had to undersell. I knew I was doing the wrong thing business-wise, but I couldn’t figure out why. How could being the cheapest guy in town (or gal, in my case) be bad for the bottom line?
Now, with years of experience under my belt, I understand the tremendous disservice I was doing myself, my competitors and my customers.
Underselling – yourself, your customers, and your colleagues – is a big problem. It’s just wrong, philosophically & financially. It will ruin you, anger your customers, and frustrate your colleagues.
For a great article explaining in detail the problems with undercharging, check out Tara Gentile’s article on Underselling: Why Discomfort Is A Terrible Pricing Strategy.
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