Price skimming offers four major advantages.... It can offer insight into what consumers are willing to pay. It can create an aura of prestige around your product. If the initial price is too high, you can lower it easily, Finally, late adopters might be pleased to get your prestigious product at a bargain price, which creates goodwill for your company. A major disadvantage, however, is that large profits attract competitors so this price strategy only works well for businesses that have a significant competitive advantage, such as proprietary technology.