In general, when it comes down to changing the price of your product or service, there are no specific limitations or requirements. That being said, there are a couple of things to consider if you run a business-to-consumer (B2C) compared to a business-to-business (B2B).
In this short article, we’ll break down those differences so you can be sure to be compliant.
👉 Business-to-consumer (sometimes referred to as Direct-to-consumer) is a business model that involves selling products directly to clients rather than through third-party retailers, wholesalers, or other middlemen.
👉 Business-to-business is a process in which one company conducts a commercial transaction with another. This usually happens when a company is acquiring resources for their output production process, i.e., providing raw materials to another company that will manufacture output.
Business-to-consumer (B2C)
In Europe, the only restriction to be taken into account for B2C contracts is when there is an excessive increase in your prices without giving your consumer a right of withdrawal.
It is not lawful for your business to spontaneously and excessively increases the price, causing a disadvantage to your consumers, this would cause an unbalance in your contract. Therefore, the most important factor to examine is the fairness of your price increase.
I want to significantly increase the price of my product or service, what must I do?
In this case, you must inform your consumers in writing in order to give them the possibility to withdraw.
It’s always a good idea to fix a specific clause within your terms and conditions to set:
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Business-to-business (B2B)
For B2B contracts, instead, there are no limitations or notification requirements (even in the case of excessive pricing increases). However, it’s always a good idea to add a clause in your terms and conditions in order to build good B2B trust and transparency.
Terms and Conditions (examples)
Here are two practical examples of how businesses use their terms and conditions to communicate a pricing change within their terms and conditions:
Example A
“The company may change the price for the Paid Subscriptions, including recurring subscription fees, the Pre-Paid Period (for periods not yet paid), or Codes, from time to time and will communicate any price changes to you in advance and, if applicable, how to accept those changes. Price changes will take effect at the start of the next subscription period following the date of the price change. Subject to applicable law, you accept the new price by continuing to use the Company Service after the price change takes effect. If you do not agree with a price change, you have the right to reject the change by unsubscribing from the Paid Subscription prior to the price change going into effect.”.
Example B
“We may change our subscription plans and the price of our service from time to time; however, any price changes or changes to your subscription plans will apply no earlier than 30 days following notice to you.”.
These are a couple of clear examples of how Terms and Conditions set the terms for how your site, app, or service must be used and, most importantly, protect you from potential liabilities.