This is deemed to be anti-competitive behaviour, so reports can be made to the Australian Competition and Consumer Commission (ACCC). Predatory pricing takes place when a business with significant market share intentionally reduces prices to damage or eliminate smaller competitors.

ask your legal adviser to explain your obligations under this Act.

understand how this Act directly applies to your business.

This is a complex area with significant penalties, so make sure to: Price fixing is illegal in Australia under the Competition and Consumer Act 2010. Price fixing is when 2 or more competitors (either formally or informally) agree on setting a price. When setting your price and advertising your products and services, you must comply with the relevant laws and regulations. If you don't have an online presence, find out how to create a business website. Many customers will visit your website before making any direct contact with your business, so make sure it's up to date. Keep a checklist of where prices are published, for example: Ensure you communicate the changes clearly to customers. If you change your prices, make sure this is updated wherever your prices appear. Stay informed about what's happening in your market, as this will affect your pricing. You may need to review and adjust your pricing when there are changes: on a monthly, quarterly or half-yearly basis) to accommodate changes in, for example: Schedule reviewsĬonsider scheduling formal price reviews (e.g. Whether scheduled or in response to a specific change, a pricing review will enable you to make decisions based on accurate and current information.

Could be based on factors such as seasonality and supply.

A very flexible way to match price with demand.

Often used where prices regularly fluctuate (e.g.

Sales must be high to maintain profit levels.

Relies on having lower production costs than competitors.

The budget end where customers will trade off quality for price.Frequently used for products and services where price is very important.Enables the business to stay competitive over the long term.Price is set relative to that of competitors, taking business costs and profit targets into account.Commonly used by businesses in industries where there are many competitors.Customers are prepared to pay more for perceived benefits.The prestige or image outweighs the actual price for the item.Price is set higher than the rest of the market to create exclusivity.

A form of psychological pricing often used for luxury goods.Uses a heavily discounted item, even priced at a loss, to entice customers to visit and buy other products.A proven promotional strategy used by retailers.

Typically a short-term strategy due to low profit margin.There needs to be a substantial target market for the offering.Uses a lower price to generate more sales.Often used by new businesses who want to gain market share.Based on there being a greater demand for a product than what is available.The price is later reduced to appeal to the broader market.The initial price is aimed at customers who are willing to pay more to access a product early.Often used by new businesses or to launch new products (e.g.An hourly rate considers business costs and available time, unlike project-based pricing, which is a flat fee based on a project scope.Commonly used by service-based businesses and contractors.For example, if you are using penetration pricing, you would use a lower mark-up than your competitors. Adjust the mark-up depending on your strategy.Useful when you have multiple products at different price points and other costing methods are too complex.Talk to your suppliers, competitors or relevant business and industry associations to find an industry standard.also allocate a portion of your fixed costs to each unit to have a total cost of production for each unit.use just the cost of goods sold (as in our calculator example below).Similar to cost-plus pricing but takes the cost of goods sold per unit and adds the same percentage mark-up to all items (e.g.Based on being competitive while making the required profit.You will need to know the variable costs for each unit sold (cost of goods sold) and also be able to allocate a portion of your fixed costs to each unit sold.Adds a mark-up or margin to the cost of producing the product, taking all fixed and variable business costs into consideration.Typically used by businesses who sell physical products.

Pricing strategy business