Adjusting Prices in Response to Inflation

Regular price adjustments are essential for maintaining profitability, especially in times of inflation. Failure to increase prices over the years can lead to severely compressed profit margins, as illustrated by the example of a product that, without price adjustments, would have lost all profitability due to rising costs. To counteract this trend, businesses should consider implementing modest yearly price increases to stay ahead of inflation and safeguard their margins. Notably, the strategy of setting price increases for new customers while grandfathering existing customers ensures loyalty while adjusting to economic realities.