How To Determine Simple And Accurate Selling Prices Of Products

How to determine the selling price of a product (Freepic)

YOGYAKARTA - This is one of the most difficult things to do right in any business. What's that? Yes, how to determine the selling price of a product!

You've worked hard to produce your stuff, and your stuff is ready to be marketed. However, when it comes to the price you set, do you underestimate your stuff? Or do you overestimate them?

Failed to set prices properly can make customers and convert away on your e-commerce site.

That's why we compiled this article so that you can learn how to calculate the selling price of a product.

The longer you leave this question unanswered, the longer you will lose money. Setting the right price is very important because your efforts will be canceled by not focusing on this. At the end of this article, you will be able to calculate your selling price and the best technique for implementing it.

Selling prices, whether product or service, are the final price of customers or clients.

It's very important to know how to calculate selling prices because if you don't make a profit while securing a position in the market, your business won't last. In short, being able to figure out how to calculate the selling price of a product is a win-win for you and your customers. If done properly - they get a good offer, and you get a fair price.

For brands directly to consumers, there is a possibility you can charge more if your brand image is in demand such as many clothing brands, such as Adidas or Nike.

However, you need a solid portfolio to support your price or a strong marketing campaign.

In short, you always aim to make a profit. Otherwise, your business will not develop.

Now, the longer version. As a producer that calculates the selling price, you must first calculate your basic price, or known as production costs, by using this formula:

Cost Prices = Raw Material + Direct Manpower + Manufacturing Cost Allocation

Say the principal price of an item is $50.

The short answer is that you need to collect more than this number to make a profit. However, the practical rule is to add a 25% mark-up technique known as setting the cost-plus or mark-up price. Your sell price formula will look like this:

In this case, the selling price is $62.50. However, you need to consider other factors, such as:

If your pricing strategy and your competing pricing strategy are the same, then it's like losing the use of useful tools.

Like it or not, customers conclude a lot of information about your business from your price. Another thing is price change results are not always linear. For example, a company can increase the price by 1% and see overall profits increase much more than that, even if demand remains the same.

The best strategy you can apply is to be flexible.

For example, What will be borne by the market is better during a short period when you need to close costs quickly, such as releasing a new SKU after the R&D period. Cost-plus pricing is a way to calculate the selling price per unit. On the other hand, what will be borne by the Market helps you decide whether this approach can be improved.

Once you get the right price, you can apply the most significant digit price.

Committed to changing your price for a specified minimum time and sticking to that plan. Don't constantly change prices, because this can reduce customer confidence in you.