How to Price Products
Looking for advice on basic product pricing? Have you wondered how you should put a cost to your services? Working in e-commerce for over 10 years, we can help...
So you’ve just launched your new range of super duper speedy trainers that can fly you to space while cleaning your room and making your favourite meal. And pouring you a beer.
It could be the best product in the world. But you have got to get the price right. If you don’t get the price right it will not sell. It could be too high or too low depending on your audience.
So take a look at some of the things you need to take into consideration when you are deciding the price of your product.
What are your nearest competitors doing? You will need to invest time in research to see what are competitors offering for the equivalent products.
An item will have a bigger price tag if it’s in prominent display in a high-end setting, than if it’s being sold in a small market or one-off sale.
Stores A store will use an RRP but they may price higher or lower - it’s at their discretion. Your margin will also be negotiable.
If you have an offer or discount, this should be calculated to ensure you can afford to have your margin impacted.
If you’re selling an item online and customers are paying on the website, this is an e-commerce platform and it will have a higher cost than the basic one.
Payment Gateway costs
Every payment gateway (e.g. Stripe or Worldpay) will have an additional cost. Each transaction will take a % of the sale and this may differ if there’s multiple items.
Each sale of every item you make will need to have VAT calculated and you should bear this in mind for each transaction.
This is by no means an exhaustive list. You have to take a few of your own personal factors into consideration, or maybe the management costs will fluctuate, or there’s a seasonal aspect to this.
Every single product or service is unique and must be treated as such. But we hope this list has given you a solid start.
As always, if you have any questions get in touch by email or leave your thoughts in the comments below!
Have any other tips or tricks? Leave a comment so others can learn too.