Like many facets of retailing, pricing strategy is part art and part science. How a retailer sets prices will have a direct impact on the viability of the business. Here are five pricing best practices that can help new managers keep their businesses competitive.

• It’s Not All About Price: Pricing is only one component of a retail strategy that includes inventory management, marketing, merchandising, product choice and customer service. All components need to be running efficiently for a pricing strategy to work.
• Control Your Price Image: Customers form a perception about your prices through sometimes subtle messaging. Merchandising, such as endcaps, dump bins and pallet displays, and running promotional events can send the message that you have low prices.
• Stick To Your Prices: While you want to offer customers a reasonable price, don’t be afraid to hold your ground on what you know is a necessary price change to keep your business profitable.
• Take Advantage of Bulk Purchases: Look for volume discounts or special buys from your wholesaler or vendors. Taking advantage of these discounts and stocking up will allow you to raise your margins while keeping your cost steady.
• Educate Staff on Margin: Help employees understand the difference between margin and markup. Markup is the difference between the wholesale and retail price and margin is that same difference expressed as a percentage of sales and a better way of understanding profit.