Manufacturers and retailers take different factors into consideration when they price their products. It is not easy to just come up with a price for a commodity; in fact there is a process that they follow. The most important thing at the end of the day is being able to make profits. To price products to sell, whether you are a retailer or a manufacturer, you need to take the following things into consideration.
Firstly you look at the quality of the product in order for you to be able to price your products. Does the product meet the minimum quality standards set by the industry or any regulatory body? that is the question you should ask yourself. If the product is of high quality and standards then you can set the price on the higher side.
To price your products well, look at what competitors are charging. Collect price information from your competitors by visiting their shops or their websites. Use their prices as your guideline. Just make sure when you come up with your price, it is not too high neither is it too low. You must set an average price in order to remain competitive; at least you will know that your prices are within the range.
When you are looking to price your products to sell, make sure that the price you set is profitable. Remember you are in business because you want to make profits and also to generate sales. Of course being a little bit cheap is fine, but do not get too cheap other wise you end up out of business. Just make sure you do your maths correctly and leave a margin to make profits.
To price your products to sell, look at the manufacturing costs that you have incurred. So if you are a manufacturer you want to make sure that all the costs (overhead, operational, production and transport costs) have been taken into account. You will need an experienced and trained accountant to help you with the pricing. It is a technical exercise that requires great expertise. If you are running a large manufacturing concern, you will need a big team or department to manage that aspect alone.
When you are planning to price products to sell you must also take into consideration economical aspects like inflationary adjustments. Look at the current rate of inflation and interest rates and then incorporate it into your pricing structure. Again you need an expert to help with this one.
To price products to sell therefore requires you to consider a variety of factors. You can just come up with a price from the top of your head. You also need to consider things like transportation costs and your own operational cost, whether you are a retailer or the original manufacturer. To make decent and reasonable sales you need to make sure that the products are reasonably priced. You will make more sales and profits if you sell a product that is not only affordable but also of high quality.
Sources and Citations
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