How is Gross Margin affected by price?

A Valuable Question

Katherine the founder of GetBetterBack.com (GBB) wanted to price her product right.
At the typical store a 10% increase in revenue means a HUGE improvement in Net Income.
So, she wanted a reliable way to find the best price.

The Simple Solution

Run an A/B price test to see which price earns more.

At the higher price, you earn more Gross margin per unit sold.
At the lower price, you sell more units.

Quant Price quickly discovered that $59 was the winning price.
The Total Gross Margin was 26% higher.

Imagine the value of this discovery to your business.

The Details

Katherine wanted to maximized Net Income.

So, the objective was to maximize:
Total Gross Margin which is {Revenue - Variable Costs} across the volume sold.
Variable Costs are the costs that change with the number of units sold.
Such as:

  • Cost of goods sold
  • Coupons and discounts
  • Customer Acquisition Cost
  • Shipping (if it is free)

The Quant Price Advantage

Quant Price makes it easy to price right. All you've to do is:
  • select a few products from your store
  • and select a price range to start with

Conclusions

The customer is always right.
You win when your customer sees the price they want to pay.
Earn more with Quant Price.

Quant Price offers: