Article by Yasir Samad
There are a lot of factors that may affect the profitability of the dealer’s bottom line. Getting the right prices is a decisive step that would profit. One of the main objectives of the retailer is to make a profit, but to understand what and how to price your products can not be as easy as it sounds.
Before you can determine what strategy to use the fair retail price of its retail products, you must first know the costs associated with the products. Two key factors in factoring the product is the prices of the goods and the amount of spending.
The cost of goods in product paid, plus any shipment or medical care. The operating costs of a company or business expenses, including overhead, payroll, marketing and office supplies.
Regardless of the pricing strategy used if the retail prices of products from more than cover the cost of acquisition of goods plus the costs of running the company. A retailer simply cannot succeed in business if they continue to sell their products at a loss.
Now that you understand what your product actually costs, you should look at how your competitors are pricing their products. Retailers will also be necessary to investigate their distribution channels and research what the market is willing to pay.
Many pricing strategy exists, and each is used on the base including a variety of factors. Here are some of the pricing strategies of the most popular to consider:
Mark-up prices
The subscription fees can be calculated by adding the pre-set (usually the industry standard) profit margin, or percentage of the prices of the product. Retail subscription is determined by dividing the dollar for retail sale. Remember to keep the initial increase is high enough to cover price reductions, discounts, shrinking and other expenses, and still achieve a satisfactory result. Retailers with a diverse range of products may use different margins for each product line.
Supplier Price
Manufacturer’s suggested retail price (MSRP) is a common strategy, those small retailers, in order to avoid a price war and maintain a decent profit. Some editors are lower than the prices advertised, but also suggest retail price of the packages. Product Price
Suggested retail prices if the seller, the broker is out of decision-making. Another problem with the use of fixed prices is that it allows the retailer to have a competitive advantage.
Competitive pricing
Consumers have many choices and are generally willing to shop around to find the best price. Traders consider a competitive pricing strategy is to provide excellent customer service to stand above the competition.
Price below the competition simply means that commodity prices below the competitor’s price. This strategy works well if the retailer negotiates the best deals, reducing costs and developing a marketing strategy to focus on a special price.
Limousine price or price competition may be considered when the location, exclusivity and customer service can justify higher prices. Retailers who stock the goods of high quality, not on anything, can be quite successful in pricing their products compared to competitors.
Psychological Pricing
Psychological pricing is used when prices are set at a certain level, where the consumer perceives the price is right. The most common way is to fix prices using odd numbers ending with 5, 7 or 9 is believed that consumers tend to round down the price of $ 9.95 and $ 9 and $ 10.
Other pricing strategies
Keystone prize is not used as often as in the past. The doubling of the cost paid for the product was once the rule of pricing products, but very few products these days give a concession to commodity prices Keystone.
Multiple pricing is a method of selling more than one product at a price as three points for $ 1.00. Not only is this approach which, for markdowns or sales events, but traders have noticed consumers tend to buy large quantities when the multiple price strategy is used.
Discounts and special offers are natural part of the retail trade. Discounting may include coupons, discounts, price discounts and other seasonal promotions.
The products below cost are called a loss. While retailers do not benefit from these items at a discount, hoping consumers to buy higher-margin products during his visit to the store.
As you develop the best pricing model for your retail business, understand the pricing strategy will depend more ideal than the costs. It also depends on good prices.
It is unclear which component of prices is more important than another. Just keep in mind, the right product price is the price consumers are willing to pay, while providing a benefit to the retailer.
About the Author
Yasir Samad is a head marketing and SEO consultant for Hilal Technology. Hilal Technology provides a wide range of SEO and website design services.
