- One example of a price increase
- What is a reasonable increase?
- Why I believe companies do this
- What you can do to fight it
- Things to remember when moving
- Additional links
When you get older and start to buy your own things, you begin to notice prices increase over the years. How much more would you pay for exactly the same thing or sometimes even less? Even if everything went up by ten cents, it all adds up when put together.
For those who prefer a quick summary, everyone has their own thoughts on how much an increase should be before they switch to a competitor. Companies do an increase because they want more profit. I believe the best thing to do when faced with a price increase is to see if it’s worth staying with what you’re currently using, or switch to a competitor. However, a competitor could increase their prices over the years to match what the increase would be, and it may not be worth the time or money for you to make the modification.
One example of a price increase
For seven years I paid for Quickbooks Online because I wanted an easy way to handle the daily accounting of my business. Every year I had noticed the monthly price increase, and going into the eighth year I decided I had enough of the price increases and didn’t renew.
The most recent invoice I got (for going into the eighth year) was an additional ten dollar per month (which would be $120 for the year, pushing the price from about $300 per year to $400). While almost everyone would pay it if there was more features or a small indie company behind it, that’s not the case. Since I’ve used Quickbooks, there have been no new features (at least that were visible to me), and Quickbooks is owned by Intuit, which is a huge American company.
Why the increase? They gave no reason for why. The person who I buy Quickbooks from (I believe they are a Quickbooks Proadvisor and thus they get discounted rates), said they had told Quickbooks they can’t keep increasing the price for small businesses (and from my knowledge they received no reply, and of course when you’re a big company you most likely don’t care about the small people who worry about a price increase, you want the people who will renew at any cost, and those who are buying it for the first time).
What is a reasonable increase?
Everyone has their own judgment on how much a reasonable increase should be. In addition, some people may want justification on why there is an increase, such as because they are getting more staff, paying them better, or some great new feature.
While I’ve found it hard to find concrete statements from companies about their costs going up, we all know that everything is increasing in price, which means they need to pass that additional cost onto you and me. We can’t forget about the prices that just silently increase or product size decreases.
A majority of us aren’t just facing increases from one company, it’s from every single company. Very few people can afford for everything they purchase to go up by 20% every year while not making an equivalent or more salary increase. And consumers don’t see a reasonable justification, they most likely will change or find a cheaper alternative.
Why I believe companies do this
I believe companies mainly increase their prices so they can say they have more profit. Take the company that owns Quickbooks, over the course of one year they had a 15% increase in revenue (according to their press release released on May 22, 2025. Now, that increase may come from new people buying, I also believe it comes from increasing the price on their existing users.
The increase looks good to shareholders, as well as current and potential investors. One thing they should remember, is that there isn’t infinite growth, at some point the growth will stop.
What you can do to fight it
What can a consumer, that’s you who buy it, do if you don’t like the increase? The primary thing is find and buy an alternative. One way I’ve found a list of alternatives is by searching online (such as typing in the name and alternative, or letting auto-complete help by searching for the name vs). There’s also getting recommendations from people you know and trust.
What about telling the company you are no longer going to buy from them? Unless there is a huge uproar and their stock price soars down, I don’t believe any company will make a big change.
If you do decide to contact them, in my experience, you get a thank you and a coupon in return. Instead of using that coupon to buy another product from that company, give that coupon to where it can be used (like a food bank or homeless shelter). Many companies will send these coupons in the mail, instead of you taking the time to give the coupon elsewhere, say your mailing address is that place you want to give it to.
Things to remember when moving
After taking the time to look through the price increase, and you’ve decided your going to move to a different company, there are some things you should consider before making such move.
First, take a look to see if the initial price that you’re offered is discounted. If so, how much will the price rise when you no longer have the discount? I’ve seen it before where the non-discount price turns out to be more expensive than the company I was planning to move away from in the first place.
Second, how often does this new company raise their prices? Yes, some companies do let you lock in a lower pricing for a set period of time, that’s not the case with every company. The best way I’ve found to see this is by searching online (usually for the product or company name and price increase) as that will give you multiple reports, so that you don’t have to rely on the word from their customer support (as I know from experience, they don’t get notice of a price increase until either customers complain or it’s already public).
Third, it will take you either time or money to move to the new product. While some companies offer a service of moving everything from one product to theirs, or between any products, there’s also the option of moving it yourself. Take for example when I moved away from Quickbooks, I spent a couple of full days moving everything over (and getting used how to do everything in the new product). Karl W. Palachuk says he took about 4 months to ensure everything properly moved over. I’ve seen multiple companies offer the services for them to move everything over, none of them list a cost, and the time frame ranges from a couple of days to a month.
Now, to answer the question set out from the title, a price is too much when a majority of people figure out it’s worth it for them to move away. The maximum price shouldn’t be a huge increase (even more than 10%) unless you publicly and clearly explain to your current customers why you need to raise the price. Even if you slowly increase the cost over the years, there are still many consumers who will realize the cost is going up and start to take stock of the alternatives.
Additional links
When is a price increase not a price increase?
Consumers are increasingly pushing back against price increases — and winning by Christopher Rugaber
A New Streaming Customer Emerges: The Subscription Pauser by Sarah Krouse (paywall, paywall free copy available on archive.is)
Why do existing customers pay more?
Revealed: top US corporations raising prices on Americans even as profits surge by Tom Perkins
Should a Company Reveal Its Cost Structure to Customers? written by Michael Totty
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