How to price your products?.

Pricing can be an quest of it's own. It is part guesswork, part of it is psychology and part of it is marketing. It is always needed to keep an eye open when it comes to the competition. Pricing can be not easy but if you plan and execute. Then it might be not that hard. It is not always the price where consumers, customers, clients and prospects worried about. It is a known fact that quality above quantity counts. The price gives an idea about your goods brand's quality. This also can project the image of your retail concept. 

Why set a right price?.

It keeps the products  competitive and it is not like the food market or the jewelery store in a third world country where you can bring the prices down or negotiate. It is possible to negotiate a deal when you are a wholesale store and a retailer call you to order and you both can discuss a price. Setting the right price means that you can take your profit and deduct all the costs to play safe.

Things to consider when pricing your products.

You need to price your products in a manner that it is not too high because when it is priced too high it will make the customers leave it on the shelves. If it is priced too low it will make you that you can not cover costs and this means less profit for you to gain. When pricing your product add the costs and the profit margin on top of that. This will give you the right retail price. 

With value-based pricing you need to know what the other retailers charge. This means you can add the costs and also the profit margin to calculate the price. 

Competitors-based pricing means you are aware what the other retailers charge and you give the customers similar prices. 

There is also another pricing method it is called elasticity-based pricing. This means you can measure what product has sold well and what product not. You can give discounts when you analyze how the customers react to price changes. 

There is also the cross-product based method. This means you can price different flavours of soda of different size bottles in a product range at various prices. 

The other methods to consider when pricing your retail products are bundle pricing, keystone pricing and gross-margin pricing.

E-commerce pricing vs.brick-and-mortar pricing.

Above mentioned methods can not be considered the same when it comes to pricing. The low prices are priced online for goods other than in person sold products in the stores. It is a fact that lower priced products sell better online than higher priced products because of the risks. 

Shipping price.

The price to ship a certain size package is not cheap as in an envelop. You should include the price of shipping as a cost or calculate as a separate cost. You can indicate how much the shipping costs when you show your product for sale online on your merchant website. 

Add shipping costs upto the profit margin.

Calculate the shipping cost as a cost and add this up the profit marging and state the final price if it is free shipping. Do not leave the profit on the table by not including the shipping cost to the final price.

Test different pricing methods.

The retailers have gained success by pricing to appeal to customers emotions and instincts. Good pricing is about planning, executing, analyzing and playing the sport on a level to give the right products for the right price. You can try psycological pricing methods.

Stacked discounts: This means you can offer discounts at 25% off and another 20% off than 40% off. This way you can make the amount that is discounted look bigger than offering fixed amount.

Bonus packs: Offer 30% off than 25% off. This way it is plain to see that you give a good discount to the customers than giving them the regular prices.

Prices ending with 99 cents: Price your products with 99 cents at the end. If you offer your product for 16 dollars other than pricing it for 16,99 cent. When you price your products for 99 cents at the end. It will look like the chuncky amount is 16 dollars and the 99 cents is less. The customers do not care much as the chuncky amount about that 99 cents.