Are you trying to compete with deep discount stores that buy merchandise in huge lots, then 'pass savings on'? If you are, as a small business, you may actually be hurting your sales.
Lowering your prices can easily cut into not only profits, but number of sales you make. It lowers perceived value of merchandise or service you're offering.
Oftentimes, in eyes of average consumer, cheap is cheap, and you get what you pay for. Deep discounters never sell 'top of line' merchandise.
The single most important thing you sell is trust, no matter what product, or range of products may be. In that trust relationship customer expect you to deliver a top quality product or service at a reasonable, but not cut rate, price.
Cut rate prices break down trust relationship - idea becomes: How can it be so cheap and still be any good?
There are a couple of simple questions you can ask when figuring out cost/value equation for anything you sell. Will customer be more satisfied, and happier after buying your product or service or would they be happier if they kept their money in their pocket?