Comparison And Consideration Are Necessary To Set A Price
Determining the price of a product is as important as designing the product itself. Even though we have a good product, if the price we offer is not right then consumers will be reluctant to buy it. At first glance, the price seems trivial, but actually it can also determine the success or failure of a business. Good products at the right price will attract consumers, support the company to stay alive, and bring in profits. On the other hand, we also have to compare the prices of our products or services with other companies, so that we are not less competitive. Meanwhile, you can go to wikilink if you wish to compare the prices of various services in Norway.
But to reach that point we need careful consideration. What are the things that affect prices, and how do we determine the numbers?
Look for price points that don’t make you lose
We can start price determination by calculating the cost of production first. This production cost is broadly divided into three elements, namely:
1. Material costs. Enter the calculation of all the raw materials and production equipment you need here.
2. Labor cost. The intended personnel includes internal personnel (company employees) and external personnel, such as shipping goods or customer service.
3. Other costs. This is a cost that is not related to production. For example the cost of office stationery, marketing costs, and so on.
After adding up all these costs, we can divide it by projecting the number of products we will sell. This division will produce what is called the Break-Even Price, which is the smallest price we can put on the product so that the company does not lose money.
The calculation goes like this: Break-Even Price equals to (Total Fixed Cost / Production Volume) Plus Variable Cost per Unit.
Compare your price and quality with your competitors
When you want to compete fiercely with your competitors, you need to compare your price and quality with theirs. This is necessary so you can find the right level to set your price that suits your quality, while it beats your competitors and it also gains your profits at the same time. Just don’t lower the quality too much or customers might run away.