My biggest concern with reducing prices is that it in turn pushes retailers to find a way to reduce the quality of the products they are offering (they don't wa

My biggest concern with reducing prices is that it in turn pushes retailers to find a way to reduce the quality of the products they are offering (they don't want to operate at a loss and when they can't achieve the massive scale they need to justify the price cuts they need to do something about it). The short term effect may seem that the customer is getting a good bargain but in the long term it can only hurt him. To give a better context (software related), I often look at the price estimates certain software development shops are giving in Elance/Odesk/Freelancer.com to potential customers and their very low pricing can only make me wonder if they'll be able to deliver a quality product. You should raise your prices in order to give a better product and a better service.