Pros and Cons of Customized Pricing - Essay Example

Most of the time certain products are very cheap compared to other retail stores. This causes lots of competition between other stores. Many other stores will drop the product's price in order to gain revenue from it. Sometimes other stores will drop their product price so low they lose revenue. A good example would be B-to-B magazine.  If the retail store calculated the revenue from other stores in the area, the retail store could come up with a lower price to attract customers. 

 The cons of opening up two stores in two different towns may cause the retail store to lose money. Customized pricing is determined by the location in the town. Considering the two retail stores will be in two different towns they will have to go by the customized pricing terms. Many of the prices seen at one retail store may not be seen at the other retail store. Depending on what product the customer is looking for, he or she may have to drive from town to town to get the cheaper price for the product. Sooner or later it will be like the two thrift stores from different towns will be competing. Another good example would be B-to-B magazine. If the retail store sold the magazine for a really cheap price, the store may not get a big enough revenue.

The pros and cons of using customized pricing are equal. It just depends on what type of retail store that person wants to open up, or whether or not he wants to open up more than one store. Another aspect is what type of location he plans on opening up his thrift store. That also may determine what he will sell at his retail store and the prices.