How are the book prices determined
3 smart methods to calculate the optimal sales price
Would you like to calculate the perfect sales price for your products and don't know how to best proceed? It is extremely important for your success, as the price often determines whether the product in question is bought or not. In this post, I'll tell you why it's so important and how to get the right one Calculate sales price can.
An overview for you
Why calculate the selling price?
Many startups, founders or entrepreneurs do not deal enough with the subject of pricing and therefore do not calculate their selling price carefully. Often they just set some price and see what happens then. You can of course do that, but it is extremely difficult to set the prices higher or lower again afterwards. That's why you should look carefully at what methods there are to get the Selling price to to calculate.
But let's first clarify why price calculation is so important in the first place.
One of the most important reasons or the main reason why someone buys or doesn't buy your product is the price. So, first of all, make sure you understand the huge impact price has on whether you are successful or not. Maybe you think now that your prices are already fixed. But that's not the case. In the rarest of cases, a price is set so that there is nothing you can do about it.
Get to grips with the subject of price psychology in order to be able to calculate the ideal sales price. Investigate what factors are there. For the perfect sales price calculation, it is not enough just to have heard that if there is a 9 at the end of the price, people are more likely to buy the product. Give it some serious thought and look at how you can calculate your sales prices.
3 methods to calculate the selling price
1. Calculate the selling price based on the competition
How do you even calculate the right price? Let's move on to my favorite methods of calculating the price. The first method you can use is market-based pricing. Or rather, competitive prices. This means that you take a very close look at which competitors there are in your respective market and which prices your competitors are calling in each case.
In this way you will find out that competitor number 1 has this price while competitor number 2 has that price and competitor number 3 is calling a different price. In this way you first get a feel for what the market price is for your products and services.
You can also orientate yourself abroad and deal with how it all happens there. How do they do that and what sales prices do they calculate for the products? Then you already have a lot of information and can use the competitive prices as a source of information.
2. Oriented your sales pricing to your costs
You are also welcome to go a step further and look at your own company. What costs do you have in the production, manufacture or purchasing of your products? Collect all your costs and create a cost-oriented price for yourself. That means you collect all your prices, all the small components that go into your product, in order to get a feeling for them.
So you can calculate exactly what the costs of manufacturing your product will be. You can do this with your working hours included or without.
Then you can think about how much margin you would like to take. How much would you like to put on top of it or how much should that be so that you enjoy selling your products? So you can use the cost-oriented price calculation as a second source of information.
That means you now know all the prices of your competitors and you now also know at what price you are producing your products and at what price you should actually sell them.
3. Get a feel for customer-centric pricing
The third great resource that you can use now is what is known as customer-centric pricing. That means you really go there now and talk to all sorts of people about the price at which they could or would buy the product.
Ask them what is the maximum they would spend on it. Make sure you're asking the right questions, though. Here are a few sample questions that will help you enormously in calculating the ideal sales price:
- How much would you spend on it?
- What is the maximum amount you would spend on it?
- What would speak for you to spend more on this product? When certain components are added or when which are removed? If yes, what?
- What are the price drivers for you?
- What makes it cheap for you?
- What makes it dear to you?
So don't ask your customer just one question, but really many, in order to get a real feel for the customer-oriented price and to be able to calculate your sales price.
To summarize again, you have three sources of information: You have the prices of the competition, you have the prices of your potential customers and you have the prices that you actually have to call up based on your respective costs. With the help of all this information, you will quickly develop a feeling for the best selling price.
3 tips for optimal pricing
Tip 1: use bundles to sell your prices
Another way of calculating sales prices can be, for example, to create bundles. Bundles allow you to sell your prices much better.
If you think about how much a scoop of chocolate ice cream costs and if I were to say that a scoop of chocolate ice cream costs 4 euros for me, then you would certainly object that it is far too expensive. But if I now offer you the chocolate ice cream with a little whipped cream and a waffle for 7.50 euros, then you might say: “Yes, okay, that's actually justified.” So I've built a bundle for you. Putting together bundles can be a great way to sell your prices much better.
Tip 2: consider price thresholds when calculating sales prices
In addition, you should deal very intensively with the topic of price thresholds. Where do your customers have price thresholds? Quite often we say, everything under 10 euros or so - that's an impulse purchase, we can do that somehow. Often or for many people it is the case that the next price threshold is around 50 euros.
Then the gaps to the next price threshold get bigger and bigger. The price thresholds are not necessarily always 10, 100 or 1000 euros. The psychological price thresholds for your customers can also be completely different. That also depends a little on the product category. So deal with it intensively.
Tip 3: A high price is often a sign of high quality
Another important point is that a low price doesn't always have to be the right solution. On the contrary: a high price is often a sign of high quality. This means that customers think, “Okay, that costs something. And because it costs something, something has to be special ”.
Here in the Rhineland they also say: “What doesn't cost anything is also nothing.” And maybe that's exactly the same with your products. When calculating your sales prices, you have to be careful that your customer does not later think that your product is so cheap and therefore cannot be good.
Write me in the comments how you calculated your price. How did you go about thinking about the price at which you would offer your products? I look forward to it!
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