Decided how to pricing for the product to allow many business owners to stay up late. Not just new business owners.
The price is too high, no one can buy it. The price is too low, and the money you make is not enough. Like each competitive product, you need to find other methods to distinguish yourself.
In this article, we will study how to price the product from two perspectives. First of all, we will introduce some basic pricing skills so that everyone is on the same page. However, we will answer a few big questions.
Note: This article is compiled specifically for retail companies, so the strategy of selling B2B, wholesale, subscription, reservation, or other types of products may be different.
Price Basis -Consider of Base Line
When considering how to price the product for the first time, you must perform mathematical calculations. Development and marketing will generate costs. You must earn enough money in sales to make profits.
Depending on the product, these costs may include:
Production
- Marketing
- Labor
- Tax
- Freight, if you do not charge it separately
- other business expenses, such as licenses, licenses and licenses Warehouse costs
If you can reduce any of these costs without sacrificing quality or service, then you win, because this means that you can maintain the same price but get more profits.
But the other is the same. If the cost rises, you will lose profits.
As for marketing, the key is to find a strategy that can bring the best investment return and increase the use of these channels and methods. Of course, it is easy to do it. But this is why marketing that generates tracking data is usually more desirable than \”spraying and prayer\” marketing that cannot provide reliable methods to determine its effectiveness.
Put all these costs together and look at them according to each product or every project. What is the cost of each product you sell? Once you know, choose a higher price, the difference between the two constitutes your profits.
[12]3] These are the basis of pricing. You may have seen some challenges.
Pricing problem -what affects your pricing method of the product?
In addition to the basic knowledge of pricing products, you also face a lot of uncertainty, which started with this question: How much should I mark the price?
You must make money. However, if you mark the price of the product too high, you may scare away everyone, especially when your price is significantly higher than most competitors. At least, this is traditional wisdom. We will talk about it later.
When you start considering this and other difficult problems, the pricing becomes quite complicated.
For example,
What is the purpose of this product in your overall business plan
?
Maybe you are selling the so -called \”loss leaders\”. If you sell a product, you actually deliberately lose money. However, you do this to win customers so that you can sell other products to them in the future and earn huge profits. Some TV shopping programs, especially in the heyday of 1980s and 1990s, improved this pricing method.
If you want a certain product to become Support Lost leader’s money -making tool tool Then your pricing will be very different.
If it is a major product sold by the volume of trucks and profitable according to the quantity, then even if the price change is a few cents, it can bring huge income growth.
Another question that needs to be considered is, Why do people buy your product
?
I hope you already know the answer to this question, which is why you first created the product. But this problem is a big problem, because people want your product to play a huge role in how much you can charge them.
What you don’t want is the competition involved in the bottom. There is only one Wal -Mart, which is for a reason. There are always people who are willing to charge less expenses than you. Try to compete by providing minimum prices is a failed business and profit method.
Fortunately, it turns out that most consumers do not use the price as the main filter to determine which products to buy.
The reason for people to purchase prices People buy exceptThere are many reasons outside the price. These include:
Social status -I want this, because it will remind others of me
I’m afraid to miss -I want this because everyone else has it or it has it or it Talking about it
Value -this product illustrates my values, beliefs or passion
- Identity -this product expresses my identity -culture, religion, business, society, gender, gender, gender, gender Wait.
- Desire -I want it, because I just want it
- to meet the needs -I must have this product to meet my life needs
- Security and safety and safety and safety Privacy -I want this product because it can protect me, my family or my property
The following are in -depth research on people’s purchase of products and many other reasons.
The key is that if the product resonates with these motivations, people will pay more fees for the product. These are more important for them to pay the lowest price.
Therefore, the key to the best pricing is -you guess right -understand your audience.
Why do your audience want your product? Does it provide anything else? How much is it worth for them? The price is a bit higher than you think Once you determine the ideal price you think you think, you will increase it a little. You will help you increase profit margins, prevent inflation and accidental expenses, and make your business healthier for a long time.
In addition, this provides you with space that occasionally provides discounts and special products without damaging your profits too much.
Suppose you plan to sell a product at a price of $ 50, and the production and marketing costs are $ 30. You earn 66% of profits in each sales. However, if the cost of production suddenly rises to $ 35 due to the reasons you can’t control, your profits will drop to 43%.
The initial cost is set to $ 55, and your current income is 83%, and the cost increases 57%.
Price and commercialization
When the product is commercialized, competition will occur. Whether you are talking about toilet paper, toothpaste or corn flour steamed meat, people usually seek lower prices for such products. correct?
Not so fast …
Set the price for the price you will pay for the client. If you know why your audience wants your product, you can charge more fees. This is an article about luxury toothpaste and other oral care products. A brand sells toothpaste at a price of $ 55 per pipe! It has \”plant composition\”, whitening technology and other miracles. They are not selling such toothpaste in Wal -Mart.
This is a bit extreme, right? It’s like a toilet made of gold. Well, there is a Bloomberg article about two packs of toothpaste priced at $ 17. $ 8.50 per pipe. It was even sold by Lenny Kravitz.
The same article mentioned another toothpaste price of $ 100. Yes -$ 100 toothpaste! Why? It is suitable for those who are worried about fluoride but do not want to lose its benefits to teeth.
The key is that specialized products meet special needs. For critical audiences who value these functions, they will willingly pay for these functions. Also pay attention to the power of celebrities -when the people they trust recognize the product, people will pay more money for the product.
What about toilet paper? This is a survey of the luxury toilet paper market, with the price up to $ 3 per volume. Why? Various high -end brands call for environmental responsibility by not using plastic wrap, using bamboo instead of typical tree materials and recyclable materials. Others provide better texture. Others are sold based on beautiful design -toilet paper looks beautiful and decorated. Do you see how these companies cater to specific values, beliefs, status symbols and desires?
Yes, corn flour steamed meat. This is a story about luxury corn flour steamed meat. Six -dos are priced at $ 92, plus $ 18 of freight. 72 corn flour steamed meat 110 US dollars.
As long The product.
Four product pricing techniques
Considering all these, there are some specific skills and strategies here, you can use it when determining how to price the product. 1. Using \”free\” Corn powder steamed meat seller at $ 110 can be tried with $ 99 and free delivery.Price selling. Their profit will be less profitable, but they may sell more sales. This will be a valuable test because it uses the power of Nine.
Free delivery is a possible \”smart\” way of use, but if you abuse it, it will also give you a price, so be careful.
Free gifts when buying are another clever method. Customers can still get some stimulating things for free, but you are not sending things in vain.
2. Use \”Buy first and then pay\”
The idea here is to decentralized payment to make your customers easier to manage costs. Instant payment is a similar concept.
The point is that technology makes this service super easy and secure. Many people use it for low -cost products, or even more than 100 US dollars. Check the five advantages of using BNPL, as well as technologies paired with Woocommerce, so that you can use it easily.
3. Do not reduce prices during difficult periods
There is no evidence that the price reduction in the difficult period will maintain your profit level, your business or your ability to pay employees. The reality is that if you continue to provide discounts, customers will start looking forward to or even request discounts. You don’t want to fall into that trap, because then you fall to the bottom of the valley again. 4. Using coupons cleverly
If it is always discounted, then it is not a real sales. Customers will understand this. Therefore, if you choose to use coupons, please use them wisely. Here are some full reasons to use coupons:
Attract new customers
[
[ 123] Reduce the inventory of specific projects
Giving back to the society
Celebrating the holiday
Increase your average order scale, just like \”more than 100 US dollars orders saving 20%\” and the like The discount is the same Woocommerce has dozens of coupons that are suitable for various situations, such as smart coupons. Want to be a professional player? Read our complete guide to use coupons on Woocommerce. Do not sell yourself (or your product)
- Do not let the pricing put pressure on you, nor do you tryOthers compete.Calculate your cost and set sustainable profits.Then, highlight the advantages of your product and how they serve your customers.Pay attention to your audience is the best way to get higher prices and protect your profits.
But in the final analysis, your product price will be unique for your business and audience.It takes a little time to find the perfect number.Therefore, be sure to keep in touch with your customers and pay close attention to analysis to understand the progress that progress and the content you may want to change.
