Pricing a product is "probably the toughest thing there is to do," according to experts. Here's how to tackle it.
One of the secrets to business success is pricing your products properly. Price your products correctly and that can enhance how much you sell, creating the foundation for a business that will prosper. Get your pricing strategy wrong and you may create problems that your business may never be able to overcome.
Five major factors to consider when pricing;
- Know Your Customer
- Know Your Costs
- Know Your Revenue Target
- Know Your Competition
- Know Where the Market Is Headed
You can use the standard formula to work out the selling price;
A = Cost of Product/Material.
B = Expenses (such as; labour cost, storage cost, Tomlibo fees, delivery cost, payment processing cost and any other costs associated with that product).
C= Profit (how much money/margin do you want to make – use a standard industry average figure – if available).
[A + B + C] = SELLING PRICE
Other factors to consider are as follows;
- What the market is willing to pay.
- How your company and product are perceived in the market.
- What your competitors charge.
- Whether the product is "highly visible" and frequently shopped and compared.
- The estimated volume of product you can sell.
You can access to our product pricing calculator along with other tools from your sellers’ admin.