5 Effective Ways to Determine Selling Prices along with the full explanation
Determining the selling price is indeed one of the significant obstacles when starting the world of marketing. Employers and business people must really know the price and suitability of the right market price. So there will be no price inequality in the price of a product.
This kind of thing is indeed an obstacle if it starts from zero, many complaints, especially from early business people regarding the right selling price management. If wrong in providing selling prices, the worst thing is the product sold will not sell, or the worse is experienced by the product failed to sell.
Actually there are two things that can affect selling prices. When viewed from the case, for example someone sells a particular product with a selling price that is too high, of course it will make consumers not buy the product.
But in certain cases, there is also a business that sells goods at high prices but instead gets an impressive consumer.
That kind of thing must be excavated to find the actual meeting point what is the key to the sale of selling prices. Popularity and quality, these two things are key to a businessman in determining the selling price and makes the product sell well on the market.
Effective way to determine product prices
Actually it’s not something that is taboo again that the quality and popularity of a person is the key to success in doing business.
With a big influence of course it can increase the sale of products that are being echoed. But if it is a new entrepreneur who is opening a business opportunity, there are other ways in determining the selling price of a product.
Some of the following ways are indeed key reasons to support success in the business world.
1. Mark up pricing
A stranger sounds indeed one of these strategies. But according to its understanding, this method or way is actually very easy to follow and understand, both by those who are experienced and for a beginner. The method is quite easy and simple, the first step is to know and get the initial price.
By knowing the initial price the next step is to add a few percent of the initial price or raw material price. So a beginner businessman must know correctly or can calculate it wisely how much calculation should be added to the initial price. After finding it, the mark up price can be known with certainty.
The use of this one way is indeed a fairly strategic step in the business world. Because with this step, of course there is a profit to get profit in determining the selling price of a product. What must be remembered is not to excess the mark up price. Such things can certainly damage prices, and make consumers quickly turn away.
2. Determine the price with margin pricing
If you look at the Mark Up method, by looking at the past, it is different from the way the margin. This one way focuses on the opposite of the price mark up.
In essence, one must first know and determine the amount of products to be marketed and sold. In other words, if it has been determined, then to determine the margin is to reduce the price to be sold at the purchase price of raw materials.
After the number is obtained, it must be divided into the selling price of the product. This one way sounds rather difficult than the first. But using this one method, the sale of large amounts of products can be ascertained and determined immediately.
Must be remembered, profit income or the advantage of this one way is the same as the tactic mark up Price. It shouldn’t be more than 50%, because if it’s too high and too low the results certainly won’t be good.
3. Use the value based pricing
The cool language is a VBP tactic, this one tactic is quite popular with business activists who will determine the selling price. Freedom in using this one way is a businessman or business activists whether experience and new experiences can determine the price based on consumers.
This means that the selling price of the product, will be a value or number obtained from each consumer. There is something that needs to be considered in determining the selling price, namely the desire of one consumer with other consumers, of course vary.
To overcome this problem it requires a little long time. From the company or beginner business people, they must be swiftly and examine respondents and sampling prices in demand by consumers.
Well if you need it immediately, then what is done is to provide selling prices at the highest prices from the correspondence provided by consumers.
The highest use of selling values ​​is usually obtained when a consumer likes products based on three factors. These three factors are in the form of product quality itself, then is the popularity and the last is a scarcity factor. The increasingly rare product, the selling value can certainly be pegged at a high price.
4. Using how Suggested Retail Price Manufacturer
MSRP, is one way to determine the selling price of a particular product next. This one way is quite simple, namely to find out the selling price there is a suggestion or suggestion from the manufacturer to its consumers.
For more easy it is to call it a retail price that has experienced an equalization. Companies that use this tactic are not entirely, only some companies only.
Some companies that often use tactics or steps this is a manufacturing company. Manufacturing companies that are very often or certainly use this one tactics is a motorcycle and car company.
The problem for consumers is even though there is clearly a label or MSRP title, many cases are found there are still increasing prices. Prices that have increased are usually in certain retailers.
This case sometimes occurs according to the existing economic conditions. In addition, sometimes, more demand or goods that begin to be rare is one of the factors that can cause the price increase.
5. Determine the selling price with keystone Price
And how to determine the last selling price is to use the keystone price method. This one way is quite good effectiveness. The step is to increase capital prices to double it. This one way is never timeless. Even the use has existed since the previous trading era.
Using this one way, of course it will provide a fairly higher profit in other ways.
The main concern is, when determining the selling price in this way, the manufacturer must really provide quality products. Because if the product is not quality and not in accordance with the price, it will have a significant impact on the sustainability of the product.
Conclusion
Determining the selling price is not an easy case, for it requires the right strategy. Many cases where a company is incorrect in providing selling prices, this is very influential, of course. In some of these ways it is expected to help in determining the price of products to be sold.
The important thing you need to pay attention to in determining the selling price is to find out the cost of making the product and the service you will market. For convenience in knowing all the costs you spend use the bookkeeping process that suits the standard to make it easier for you and also minimize the recording error.
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