Here are 3 ways to determine the effective selling price
Does business not only think about how money is present to your account. But also think thoroughly about how to determine the selling price. This is important for business continuity so that it can develop better.
However, you need to understand that how to determine the selling price is not easy. You need to pay attention to the cost of production, the number of goods produced to marketing costs incurred.
Therefore, this article will explore thoroughly how to determine careful and efficient selling prices. This applies not only beginner businessmen but also upscale businessmen. Check out fine, huh.
How to determine the selling price based on costs
This method is common by business companies on a medium scale. However, it does not rule out the possibility if you want to do this. Namely, calculate all production costs then add percentages to generate profit. There are four ways for this category:
- Mark-up pricing: This method is usually done by intermediary businessman such as resellers. That is the purchase price added mark-up so that it becomes the selling price.
- Fixed Fee Pricing: business people will get compensation according to the agreement. Starting from the costs incurred until the fee obtained.
- Cost-plus pricing: This is the total cost of production costs to distribution, then added with the desired profit. So it produces selling prices.
- Target pricing: How to determine the selling price in accordance with the return of investment (ROI).
How to determine the selling price on request
This method depends on customer needs or desires. Business people conduct research like what the customer wants to change to the transaction value. So, to find out that value, you can use Price Sensitivity Meter (PSM).
However, usually the distance or location that has a product, the selling price varies. This is natural because there is time needed to reach the location. So, no wonder when products at the location, for example, Java and outside Java often have differences. This is the challenge and problems in the world of business distribution.
How to determine the selling price based on competition
If you use this one way, you consider how competitors work. There are two methods that you can apply.
- Sealed Bid Pricing: How to determine the selling price based on the offer submitted by competitors. There are times when the type of business is the same, but business opportunities are different. This can be a gap for you. Just see how they determine the selling price. Then, you take the right number so that it produces transactions against customers.
- Perceived Value Pricing: How to determine selling prices based on the selling price of the average business industry. Do you often know what the product is the same but the price is different. Usually it is taken from the application of lower limit prices and upper limits. So, in order to be a transaction value, you can use the price in the middle.
These three ways will help you in the business world. Remember, business competition is not only seen from products, logos, or services. But also see how you determine the selling price.
When you understand the importance of how to determine the selling price for business, you are ready to run a business. In order for business to grow, use payment methods that are in accordance with customer preferences.
Receiving payments according to customer preferences can increase your business sales. With Xendit, you can accept payments via e-Wallet, Virtual Account (Bank Transfer), Credit / Debit Cards, Retail Outlets, and Installments without Credit / Debit Cards.
In order for your business to grow and increase the number of customers you don’t forget to advertise through the Froggy Ads service, you can start by advertising your product, so that later you can improve visitors in your online business portal. FROGGY ADS is an online advertising service that can help you control all your product campaigns. Helps you target the targeting target you want and give you many choices to market your product.