Settingh a base price for a product

Discussion in 'Growing and Managing a Business' started by Aun, Aug 2, 2011.

  1. Aun

    Aun
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    Good day readers,

    I want to know that how to set a base price for any product which is already in markets and you wish to sell it too.
    Which is the quick way to get an idea for setting a base price for your product fast and then by looking your available sources for that product for you; you make addition or deduction in final ask price.

    I think on ebay you can have such type of information other than this i don't know. However I want to know the other sources where you can get an idea for the base price.

    Ragards
     
  2. Fergal

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    The first thing I would do is look at what my competitors are charging, then look at your costs to see what price you need to sell at, in order to make a good profit. However, even more important than all of that, is researching your customers to see what they value and how much they are prepared to pay for that. Perhaps you can make your product superior to anything provided by your competitors and charge a premium in return?
     
  3. Gary Barzel

    Gary Barzel
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    You can ask your supplier, they will often let you know what the normal mark up is on their goods. Your goal should be to achieve the highest possible profit margin while maintaining the highest possible sales level. You may be adding value to your product by offering free deliveries, or some other form of extras that your competitor doesn't offer. Those extras will allow you to charge a higher price.
     
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  4. Peter Birganza

    Peter Birganza
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    Hi,
    I would like to say that first of all calculate the cost of manufacturing, packaging to till last process of deliver for that product. It will tell you that what actually it costs you. Than relate this price with competitor of the same product. You have to keep less margin on this product to get interest of your customers. I mean the price should be less than your competitor and after making a name by your quality product, you may increase the demand of money for the same product. But in start you must have to set less price than the manufacturer of the same product or set your market price.
     
  5. James Greg

    James Greg
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    When working in retail, your final price depends on your purchase price. It all depends on the costs you would have to cover up until the end of month to run your business. If you have a rented outlet your liabilities are sure to increase. But also it all depends what do you think is feasible, if having 5% profit seems fair for your product then you can put a price tag on it as you wish within that 5%.
     
  6. eBiz

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    That it is quite complex. We need to talk about the theory of pricing.
    If you really want an answer. You need to find books about it directly.
    You may want to try to find the library. Read about Price theory.

    It really helps a lot.
     
  7. Fergal

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    Why do you say that? There are a huge number of business owners all over the world, who set their prices based on a knowledge of their costs and their customers, without ever having read a book on the subject.
     
  8. sigma

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    I don't sent the product price based on the market price. To set the product price, you shall first understand your cost, then you can have idea on the minimum price. Then, you gotta work out on your own cost analytic to find out the best price for the break-even. After set the price, you can brandmarking it to see whether it is "reasonable", you can consider to make some small adjustment if necessary
     
  9. Aun

    Aun
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    I agree with Fergal and I have expressed that the product is already in the market and just to get a quick and fast review about its current price in the market and to get that review where should I look for that was my concern I have given already an example of a site of ebay this one I know and other I don't. I know how to get the cost of a product calculated, how to get a break even point, which number it will take to get the economies of scale, 4P's of a product etc. I am not writing to get a bookish knowledge I need practical ones. Some of my friends who are doing business they usually set the base price of their locally purchased imported product through watching its price on the internet. That is the thing I want to know that what are these sites other than ebay
     
  10. eBiz

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    We're missing the most important thing.

    Pricing is not just about price increases of the cost.

    It contains details such as price, time to time according to its demand.
    It provides a way to set prices to maximize profits.
    It is necessary to drill down to details.

    I would like us to try to study.
    It is a very important component, Really.
     
  11. Fergal

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    The most important factor to consider when setting your price, is how much your customer is prepared to pay for your product. If your costs are low, you wouldn't set a low price if your customer is prepared to pay a much higher price for your product or service. Conversely, if your costs are high you may still have to sell at a low price, if your customers can't or won't pay a higher one - obviously in this situation you would probably avoid being in that business all together.
     
  12. Aun

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    Ok I want to find that comparison for UK and USA markets online now what are those sites please.
     
  13. Aun

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    Study? I guess everybody here are trying to set a business premises or to expand those premises for themselves and they have done with their studies. correct readers?
     
  14. Fergal

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  15. Aun

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    ok Fergal
     
  16. ArcSine

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    If I may crash the party late...

    Aun, you're asking what resources are available to allow you to get immediate, real-time reads on the spot (current) prices of products in the market? (Against which you'd then check your purchase-cost opportunities and decide if you want to deal in that product?) Apologies if I mis-read.

    If so, that'd depend completely on what product(s) you're interested in. Stocks, bonds, currencies, houses in geographical region X, eggs, corn, forklifts, used books, used paper towels......prices for most things are available, provided it's something that trades in sufficient volume to make it worth someone's while to monitor, compile, and publish this info. But of course, the info for each product comes from a different source.

    Ok I want to find that comparison for UK and USA markets online now what are those sites please. As Fergal so succinctly put it, "That depends on what you're going to be selling." There is no www . TheBigSiteOfEveryPriceInTheWorld .com, so you'll need to be a bit more specific. With roughly 5 bazillion products on the planet, I'm putting it mildly.

    Side note to earlier posts which, I think, digressed a bit from the intention of Aun's query....to which I'll add my own digression since I wanna play too: If your product is a commodity, homogeneous more or less to those in an active market---The market sets the upper bound on your price. Period. Your cost analysis determines whether you can competitively play in that market. If you let your cost analysis lead you to pricing at a premium to the market you'd learn a rough lesson the hard way.

    Cheers, all!
     
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    #16 ArcSine, Aug 5, 2011
    Last edited: Aug 5, 2011

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