If you set the value too low , you may find it difficult to cover costs and make a profit. If you set the value too high , you may scare away customers and face market instability.
After all, 6 out of 10 consumers consider price to be the decisive factor in their purchasing decision.
Fortunately, there are some simple methods for determining the selling price. In this article, you will find the main theories behind the figures and a step-by-step guide to putting the selling formula into practice.
Summary
We highlight three strategies for calculating the price of a product: Gross Utility, Perceived Value and Social Orientation.
Gross Profit: This method involves mexico phone number lookup multiplying the purchase cost by the desired profit percentage and then adding that result to the purchase cost to determine the selling price.
Perceived Value: Some brands set prices based on the experience they offer customers, especially luxury companies. Improving the customer experience can increase perceived value and sales.
Social Orientation: In cases of products subject to government regulations, such as cigarettes and alcohol, it is necessary to consider specific tariffs that may increase the final price.
Steps to determine the selling price: identify variable costs, establish a profit margin, consider fixed costs and compare prices with the competition.
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Methods for determining sales price
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How to go beyond price and win over customers?
Methods for determining sales price
If you are wondering how to calculate the price of a product, keep in mind that this depends on the theory you adopt. Based on marketing and consumer theory studies , we highlight three types of strategies that you can use.
1. Gross Profit
Common among retailers and wholesalers, this method calculates the price of a product by multiplying the purchase cost by the profit percentage you want to make. The result obtained is then added to the purchase cost.
Sales formula example: gross profit
Imagine that you own a clothing store and you buy t-shirts from a wholesale company for $5 a piece. You decide that the profit percentage for a product in your store is 40%. Based on gross profit, you should: