It is not easy to calculate the prices of your products. A good sales price does not shake your sleeve (unfortunately). That is why we give some tips in this article.
Look & compare
Look around you, what do others charge for (approximately) the same products? There are useful tools such as ours that allow you to make an inventory of such data automatically. You can also automatically keep your prices up-to-date.
By comparing, you get good insight into market price averages and excesses. You can then see if it is possible to adjust your prices or even go under the market price, or decide to ask more and offer extra service and quality. The price calculation is completely dependent on what you choose as a strategy.
Ask ten people (or more) if they want to answer a small questionnaire for you. Ask questions such as: “Would you buy this product for an X amount? And for a Y amount? Z amount? What is positive about this product? What do you find unfavorable?” Etc. This paints a clear picture your products value in the eyes of the customer. With that information, you can respond to the market. It can also give interesting insights to prepare your product description.
If you don’t have a big budget for a research, you can also use students. There are many students who have to make practical assignments. For a small fee, they are happy with a chance to fulfill their school assignment. You often get interesting insights of good quality, with which you can do something, depending on the assignment you have given.
What do you want?
First, think about what it is exactly that you want to achieve, before adjusting your prices accordingly. Do you want to break even? Or are you going for a big win? Which strategy do you apply and how quickly do you want to achieve this? Give yourself the time to brainstorm and thoroughly answer all of the questions above, so you really get to see what you want and than make a plan for it. Also, ask yourself more questions than just the questions above.
Focus in the price calculation
What is your focus? Supply and demand? Cost? Or competition? It is important to know in advance what the focus will be, when considering a product price. Do you always want to be the cheapest and thus compete with the market as a price fighter? Or would you rather be slightly more expensive and focus on providing a great service?
What kind of products you sell plays a huge role in this. Do you focus on products that are naturally subject to low prices and high competition, or are you going to sell market-specific products? Do you sell products that you don’t have to worry about in terms of personal sales? Or do you sell products where you have to sell yourself intensively? For example, if you sell works of art and explain the origin in personal interviews, submit proofs-of-origin, proofs of authenticity, etc.
This can all play a part in the price calculation and deciding which pricing strategy is best for you.
Sell value, no price
By emphasizing what your product is worth (in use), instead of focusing on just the price, you can raise the price of your product. If someone wants to buy a car and makes reasonable demands and puts safety first, that person will probably not look for the cheapest car, but the best car. Someone who collects art does not want the cheapest Rembrandt, but a real Rembrandt.
There are probably people who want your product, but not the cheapest version of it, but the best version of it. Take this into account in your price calculation and think about what you can offer extra.