How to fix the price of a product
To be an entrepreneur you have to know how to make decisions. One of the most important is the one that concerns the price of the product that is going to be commercialized. There are a series of steps that every entrepreneur must follow to set the sale price of a product . In the following article, it shows what aspects should be taken into account.Steps to follow:
The first thing that has to be done to fix the price of a product is to study the market and the sector to which it is directed. It is important to know what purchasing power your target audience has, what their age and professional situation are.
Before jumping into the pool and once you meet your audience, study what the competition does, as well as its price. This information must also be assessed when setting the price of a product. If you set a price much higher than the competition, you run the risk of losing customers.
How is the product you have created? There are products that are essential and that, therefore, are consumed daily and consumed quickly. For that reason they have a lower price; while other types of products that are long-lasting or luxury products cost more.
Also take into account the fixed and variable production costs of each product. To do this, an estimate can be made of how much the price of electricity costs, the salaries of employees, the rent of the premises or the materials to produce the product. The total cost of any product is also fixed based on these costs.
Once you have an estimate of how much it could cost to produce the product, set the percentage of benefits you want to obtain with the sale of each product. Any percentage of profits can be fixed, but it is not advisable to increase this figure too much, since the employer could risk that the consumer does not choose to acquire this object and, instead, go to the competition to market a cheaper product .