Regular Price – How To Find Clients
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After buying your products at wholesale pricing, you must decide on what type of retail prices to set. Your retail price can be determined using three pricing models: cost-based pricing, competition-based pricing or customer-based pricing. Cost-based pricing sets your price based on product and operating costs. Competition-based pricing uses local competitors’ prices to decide on retail charges. Customer-based pricing sets retail prices based on how much the products is in demand.
Review the manufacturer suggested retail price as a starting point. This gives you an idea of the value of the product from the manufacturer’s perspective.
Choose a markup percentage using the product cost. For instance, if you purchased a product for $1.50 and you want to use a 20 percent markup, the retail price would be $1.80. Markup percentage should be able to cover all operating costs and earn you a profit from selling the product.
Set prices close to your competitors. Charging too much or too little for your product hurts your business. Very low pricing makes the quality of your product suspect while charging too much is likely to drive customers to your competitors.
Compare the quality of your product with competitors. Increase the amount you are charging for your products if you are offering additional services or are selling a better quality product. For instance, raise the retail price of windows you are selling if you include free measurements with purchases.
Allow prices to reflect the image you are trying to project for your company. Budget retailers want prices to show that customers are receiving the best possible deal. Businesses with higher prices may appeal to customers looking to own prestigious merchandise.
Lower the retail price on slow-moving inventory. Draw in new customers and reduce inventory by choosing a low price on your worst-selling products.
Warnings
- Never focus entirely on competitor prices and ignore the cost of operating your business when setting retail prices.
References
Photo Credits
- Siri Stafford/Photodisc/Getty Images
About the Author
Heather Topham Wood is a seasoned writer whose work has appeared in numerous publications, including USA Today, Gadgetell, Feel Rich and Step in Style. Heather is a published novelist with six Amazon bestsellers and a contract through Crescent Moon Press. She holds a bachelor’s degree in English from TCNJ.
What is Business ?
Business is the activity of making one’s living or making money by producing or buying and selling products (such as goods and services).[need quotation to verify] Simply put, it is “any activity or enterprise entered into for profit.”
Having a business name does not separate the business entity from the owner, which means that the owner of the business is responsible and liable for debts incurred by the business. If the business acquires debts, the creditors can go after the owner’s personal possessions. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business.
The term is also often used colloquially (but not by lawyers or by public officials) to refer to a company. A company, on the other hand, is a separate legal entity and provides for limited liability, as well as corporate tax rates. A company structure is more complicated and expensive to set up, but offers more protection and benefits for the owner.
Regular Price – How To Find Clients
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