To determine the selling price is not too easy, business people must be able to take adequate profit so that the survival of the business will remain stable. Businesses (especially beginners) must consider several important factors when determining the selling price of a product. In your opinion, what are these factors?
Factors Determining Selling Price
- Thread starter Suba
- Start date
In setting a price, a company must consider the cost of the product or service, the desired profit, the market or competitors' price, and the economic or business trends. The product cost includes not just the price of direct materials and labor and other variable costs and expenses, but also the fixed overhead and expenses of the business. Once the cost is obtained, the desired profit is added to the cost to determine the initial selling price. This price is usually adjusted after considering the current market price. A financial model is usually prepared to determine the breakeven point and to analyze a range of operating scenarios. The company may also adjust the price based on prevailing economic conditions.
The factors that determine the selling price of a commodity is the cost of production.
Yes you have to factor in everything spent to get the product ready to know the actual selling price.
Yeah, but the cost of production and many others will determine the price of the product. But the cost of production is usually the major thing.
Sure because you need to have a selling price that will bring in profits
Yeah, when you put the cost of production together with other things then you'll come up with your selling price. It is the selling price that will bring your profit.
Factors which determine the pricing of a product may include the Cost of production, overhead costs; the Demand in the market; Competitors' price; Product positioning ( whether it is positioned as a high-end or low-end product); as well as the desired profit margin.
I quite agree with you. Demand and supply is one of the major factors that determines the price of a particular product. When the demand of a particular product is high and the supply is low, the price will probably skyrocket.
Price of commodity is determined by natural force of demand and supply. If there is scarcity of a product, the price tends to go up. In the other way around, if there surplus of a commodity, the price tends to go down. This is simple of economics.
The selling price is determined by different factors including the cost at which the products what's back from the market,, The rise and fall of a country's economy. Etc
Whenever you are considering you're selling price you will always have to consider what your competitors are selling in the market before you will fix your own selling price so that you will not fix what will not be able for you to sell your product.