5 tips to increase your margins in a competitive market

Waste is perhaps the biggest margin killer in the retail market. As soon as products are left for too long, become damaged, outdated, or simply no longer on-trend, they often end up in the sale rack. And every time you discount, you sacrifice margin. Flexible purchasing is therefore one of the most effective ways to increase your margin.

Price is more than a number; it is a combination of value, experience and positioning. A strong pricing strategy therefore directly ensures a higher margin. When determining your prices, don’t just look at the prices of competitors, but also at the value you offer. Your customers do not only choose based on price, but buy precisely because your assortment is distinctive, because your store or catering establishment feels inspiring and because of the quality you offer.

By making smart use of psychological pricing principles, you can easily raise your margin to a higher level. Consider offering a premium option that is just a bit more luxurious. Many customers automatically choose the mid- or high-end segment when you present the options logically. Bundle prices also work strongly: for example, combine a candle with a holder, or a styling item with a matching accessory. Pricing strategy is also about timing. You can safely price seasonal products, limited editions or trend items higher when demand peaks. And small price adjustments, sometimes of only 50 cents, can already result in a significant margin improvement on an annual basis.

Cross-selling is one of the most underestimated ways to directly increase your margin. While in practice it is precisely one of the easiest techniques to generate more revenue from the same customer. It revolves around one simple idea: if someone is already enthusiastic about a product, then the step to an additional item is often small, as long as you make that choice logical and attractive.