Product Price, the term is used in economics and finance, is the act of determining a value for a product or service. In addition, pricing occurs when a business decides how much a customer must pay for a product or goods. It refers to the decision-making process that set up a value for a product. So there are many different strategies that a business can use when setting prices, but they are all a form of product pricing.
The different types of products you sell need their price listing, the price you charge your buyers or clients will have a direct effect on the success of your business growth. Though pricing plan can be complex, understanding these basic rules of pricing are beneficial
All product costing must cover costs and profits. The most effective way to lower prices is to lower money and set discounts.
Examine prices regularly to assure that they reflect the dynamics of cost, market demand, response to the competition, and profit.
Costs must be set up to assure sales.
How to Create Product Price List in EXCEL
Create a list of products and retail units your company sells using this handy price list template for Excel. This product price list template includes columns for retail and bulk pricing amounts. So, easily create a pricing worksheet for your products and categorize your inventory by product number and description.
The Product Pricing template helps you to calculate simply how much it costs to make each of your products and sales.
For instance, Material, production and labour costs are added to the worksheet. This template is formatted to calculate the rest for you.
The template contains Columns for Product Number, Name of Goods, Description of the Product size and Material. And for the Net Amount, it contains Retail and Bulk Price Unit.
This is a Handy and Easy Template for business use.
Types of Pricing
The competition’s prices can give you a structure for your pricing. So, decide to match and track the competition, undercut them, or, if you feel you offer better goods or services, charge more than them.
This approach responds to the movement of what product is in demand—whether it’s declining or growing. If demand is increasing, a seller may increase the selling price, especially as supply becomes more limited. Home prices are primarily based upon the number of customers in the market and the number of homes available for sale. Discount shows how demand-based pricing works when demand is decreasing.
Used by manufacturers and retailers, a markup is calculated by adding the amount to the cost of a product, which results in the price charged to the customer. For instance, if the cost of the product is $200 and your selling price is $240, the markup would be $40. To find the percentage of markup on cost, divide the dollar amount of markup by the dollar amount of product goods.
$40? $200 = 40%
Objective of Pricing
Maximize your Profits
Capture the Market Share