Does The Pink Tax Threaten The Security of Your Business?

Do you have a retail or service-oriented business? In either case, you’re aware of how competitive the marketplace has become. Staying in the pink is not as easy as it used to be, is it?

Speaking of pink, have you heard of the Pink Tax? If you have, and you think this strategy helps raise your bottom line, it’s about to catch up with you. We’ll tell you why later in this article.

If your business is surviving or thriving, there’s something you’re doing right. However, in this competitive marketplace, your success will only continue if you stay on top of current business trends.

That means not only going with the flow, allowing the current to carry you, but also learning how to swim upstream in some cases. This is especially true over the last decade factoring in—not just the guy next door—but also online companies vying for your target customers and clients. A global marketplace puts more players in the game, making your slice of the pie even smaller—unless you guard your position and stay ahead of the competition.

Back to the Pink Tax.

We have some surprising information that might give you an edge. Pay close attention if you want to stay a step ahead. Let’s start with a short story.

Laura and Jake wanted to get their twin daughters bikes for their birthdays. One of the girls loved green and the other pink. When Laura and Jake got to the store they were shocked to see the pink bikes were $19 more than the other colors. Same brands, same models.

Were the pink bikes mismarked? No.

Were the green bikes on sale? No again.

The price variance on the bikes is just one example of what’s referred to as the Pink Tax—the practice of charging more for products and services targeting girls/women. Pink is characteristically a female color preference.

Is the pink tax something new? Hardly. It’s actually been around for decades, if not longer. But thanks to a California study in 1994 illustrating how common gender disparity is, a bill is being introduced in the House to make gender-biased pricing illegal. This is where you want to pay close attention.

According to, the study reports that the average woman pays an annual gender tax of about $1,351 or about 7% more for everyday products and services.

There are always two sides. Assessing whether this substantial price discrimination can be justified by higher production costs is a huge concern in the California study. One of the strengths of the report is that it includes photos of a variety of products.

For instance, if fixed costs per unit are higher on women’s products, the retail price differential might be seen as legitimate. In situations where the actual cost is higher, an increased price retail price might be understood.

In some cases, the cost of tailoring a women’s suit might exceed the cost of tailoring a men’s suit. Even though less material is usually needed for a women’s suit, the production cost may drive the wholesale price higher.

If the wholesale price is higher, the retail price will understandably be higher. According to the study, in most cases, higher-priced women’s items cannot be justified.

If your company assesses a version of the Pink Tax, you may want to redirect toward fair pricing for all customers/clients. Stand out by heading the pack as information from the bill spills into common knowledge.

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