Successful Pricing Strategies for Businesses.
A lot of entrepreneurs always have trouble with pricing, business owners always want to make enough so they can have a healthy profit and at the same time, would not want to charge exuberant amount so they wouldn’t chase customers away. As well, they need to consider their brand when fixing prices, if the business is known for low prices, it will be unhealthy to start selling at a high price. With this been placed into consideration, business people always have to think deep before finding a perfect price for their goods.
Finding the Best Price for Products
What is the minimum Price?
In other to get the minimum price of a product, the sum of actual cost to buy or manufacture the product in addition to the proportional cost of the business expenses which includes rent, labor, shipping, insurance, and so on. The total amount of all this determine the least ask price for the product. Anything less is going out of business and anything more is profit for the business.
Are you selling for less or lots
In pricing, the branding of the business is important. People pay more for a BMW than a Volkswagen because BMW sells fewer product at a higher price while Volkswagen sell more cars at a little leser amount. The two companies are making good sales and profit. . The business based on the brand can sell a lot for less at a lower profit but supplements with volume, less for a lot at a higher profit, or something in the middle.
Check Your Competitors
Consumers always like to compare prices before purchasing so it is better you are at the same price a little higher or lower but not exceed the competitive range. The business needs to know if it will wants to undercut its competitors, or match them while offering things they do not offer. When analyzing competitors’ prices, make sure to check if the products are superior, inferior, or similar. Try to understand why your competitor is making sales at the current price, and see if you can match or beat such competitor.
Set the Price
Since you know the expected amount that might be charge based on total cost of purchase or production, Prices can be set accordingly at a moderate rate. Do not forget that the first price is not the final price, prices can either go up or down depending on demand and reviews on price from consumers
Conclusion
Product Pricing isn’t magic, it is a skill, an art and a perception. The price of a product is dependent on the value perceived by the consumer and also affected by demand and supply in a free market.
Greetings friend @ireti.
I consider that to establish the price of a product or service, it is necessary to arrive at the determination of what I call "The Factor".
To find "The Factor" we must consider all the aspects that represent an expense, or in this case an "investment".
In this step, we must be very careful and study the entire economic and legal framework that surrounds the production and distribution chain. We cannot forget to include any aspect because this would represent a future loss for the company.
As a result of all this summation and subsequent average, we will find our "cost price".
Starting from this cost price then we can establish the "minimum sale price" which will include my "profit margin".
That's when the factor is born. It is that magic number that allows me to multiply with the cost price and obtain my minimum sale price.
Interesting article, I really liked it.
Your friend, Juan.
@juanmolina,
Thanks for your contribution, i must confess that it is an addition to my post. I am glad you were able to read this
Thanks again
It´s always my pleasure to read your work.
Resteemed already :) Upvote on the way
I will be expecting :)
Pricing can be a very difficult task as you are in the middle of not selling above your customers and not selling too low compared to quality. It is good seeing this post. Thanks for sharing
Setting prices is one of the numerous problems of a business, finding the right price for the product. Approaching the market with the wrong price is the beginning of a downfall for the business.