Skimming Pricing

Skimming pricing is a strategy where a company sets a high initial price for a new or innovative product, targeting customers who are willing to pay more for early access. Over time, the company gradually lowers the price to attract more price-sensitive consumers. This approach helps maximize profits from less price-sensitive customers first, then expands market reach. It’s often used for technology, electronics, or luxury items where demand is strong at launch. By doing this, companies can recoup their investment quickly before competing products may enter the market.