How to setup the price for a particular product?
To set up an optimum price for a product in your store. You should An “optimum price” factors in all your costs and maximizes your margins while remaining attractive to customers.
Factors taken care to set the product price in an online store:
1. Enquire the market Value
Know the market and check the prices how customers may pay or how much your competitors charge for the particular product Decide accordingly to match or beat your competitors price based upon the quality of the product.
2. Use the best pricing technique
Based upon Cost-plus pricing add a mark up percentage to costs varying between products, businesses and sectors. Value-based pricing is determined by how much value your customers attach to your product. Decide which approach is most suitable for your products before making a calculation.
3. Work out on your costs
Include all direct costs, including money spent developing a product or service. Then calculate your variable costs the more you make or sell, the higher these will be. Work out what percentage of your fixed costs the product needs to cover. Add all of these costs together and divide by volume to produce a unit break-even figure.
4. Concentrate on Cost-plus pricing
add a margin or mark-up to your break-even point. This is usually expressed as a percentage of break-even. Industry norms, experience or market knowledge will help you decide the level of mark-up. If the price looks too high, trim your costs and reduce the price accordingly. Be aware of the limitations of cost-plus pricing, because it works on the assumption you will sell all units. If you don’t, your profit is lower.
5. Set a value based price
Always check the market to set the product price based on the value.
6. Offer Discounts
Offer discounts on selected products or categories to customers and promote them generating a commission option with some amount of percentage or fixed amount.
7. Set coupon codes
Set coupon codes for the popular products on occasion to raise the profit .