With the Australian Bureau of Statistics (ABS) revealing that nearly three in four (72%) businesses anticipate reduced cash flow over the next two months, is now the right time to change your prices?
There’s no black-and-white solution that suits every business. Whether or not you decide to change your prices will depend on your cash flow, the industry you operate in, your business model (physical or digital store) and a range of other factors.
However, before we dive in any deeper, the first thing to remember is that price gouging is illegal and could have serious consequences during the pandemic. The Australian Competition and Consumer Commission (ACCC) has set up a dedicated COVID-19 Taskforce to crack down on businesses that are taking advantage of customers during these challenging times, so it’s important you understand the legalities around changing prices.
That doesn’t mean you can’t change your prices in light of COVID-19. In fact, it may be your best bet to keep your business operating and your employees on the payroll. Let’s explore your options.
There are a few key indicators that may mean it’s time to change your prices. These include:
There are a number of instances when you shouldn’t change your prices. These may include:
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The final decision to change your prices will come down to your current circumstances, your business plan for the next 12 months and your predicted cash flow. However, it’s important to take stock of the pros and cons of altering your prices.
Pros
Cons
COVID-19 is causing major business disruption across Australia. If you’re unsure how to price your products or services, speak to your financial advisor and focus on developing a pricing strategy that suits your business. Government stimulus packages like the JobKeeper payment may also lift some of your financial burden during this time.
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