sell to best price it is a true art. On the one hand, the need to add value to the product to keep the business going. On the other hand, the negotiation with the customer, who always wants to pay less. Here we give you some suggestions so that you can increase your profits while conquering the customer.
Product Price Definition
In order to sell at the best price, you must first understand how the products are priced your business. Mauricio Galhardo, managing partner of Praxis Business and financial specialist, explains that there are two ways to calculate the selling price of a product: based on cost or by analyzing the market and competitors’ prices. is ideal merge the two paths.
“Pricing a product simply by calculating its values can cause the product to move away from what the market is practicing. But also only assume a value for the market it’s a big mistakebecause if you don’t take into account the production values, the price may be below what is payable and losses may result to the company,” he explains.
To calculate the best selling price, you must take into account four factors: Cost of the product (purchase value on resale or sum of the values of raw materials and supplies in the case of industry), variable costs (VAT, commissions, packaging), fixed costs (operating costs). , with staff and administration costs) and percentage of the profit you are looking for.
These variables will take you to selling price. Compare it to what your competitors are charging to get an idea of what the best price is.
“If the calculated cost is below the market value, the entrepreneur can choose whether to sell it at the calculated price or to increase it according to the market price. If the calculated price is higher than the market price, it is worth analyzing how the costs – or even the profit margin – can be reduced that’s intentional – to get a competitive price for the product,” says Galhardo.
The best pricing plan
The following plan will help you find the best price for your product compared to your competitors:
- define that real cost – offering the product for sale in your company, taking into account the purchase value, taxes, shipping costs and other costs.
- Find the percentage of Steer affecting the company’s sales.