Your products are a bit like children, right? They are your creatures, and they are invaluable to you. Unfortunately or fortunately, at some point the time comes to launch them on the market, and I would say that “invaluable” would not be very successful as a selling price on your product page.
So you have to roll up your sleeves and find the perfect selling price for your products, your target market and your customers.
There are many theories about it, but one thing is certain:
Assigning a sale price to your products without following a clear strategy is tantamount to failure.
In this article you will find the most effective strategies for determining the sale price, and for each of these the formula for calculating the most suitable sale price for your products and your business.
How to choose the sale price?
Determining the selling price of your products doesn’t have to be a huge undertaking. Sure, the sheer amount of books, ebooks, theories and strategies that exist might make you think otherwise, but that’s not the case.
On the one hand, such a large amount of information is to be expected, given the importance of the selling price. On the other hand, the price is one of the most important factors in the purchase decision.
Moreover, you certainly can’t waste days studying cell phone number lists usa all the strategies and theories in circulation before being able to make a decision.
Those who do business know that time is money. So here’s the good news: you absolutely don’t have to analyze every single strategy in detail in order to start your business and determine the selling price of your products.
Analyze the most used strategies, identify the one that best suits your situation and focus on that.
But how to choose the formula for calculating the sale price that best suits your business?
Choose the formula for calculating the sale price that best suits your business
As we have said, the strategies for calculating the sale price are many.
Here are some of the ways you can determine the selling price:
- Based on psychology
- With bundle offers
- With Freemium strategy
- Based on working hours
- According to the project
- With dynamic strategy
… and so on and so forth.
Personally, especially when it comes to ecommerce, I think there are three ways that stand out above all to determine the selling price:
- Based on cost
- Based on competitors
- By value
If you want to learn more about the theory behind these three modes, you can take a look at our article on pricing strategies.
If you prefer to take action, here are the best formulas for calculating the sale price.
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Calculate your selling price based on cost
The formula for calculating the cost-based selling price is by far the most common.
Basically, you need to price your products by considering your fixed and variable costs and the profit you want to make from each sale.
What are your costs (fixed and variable)?
So start by calculating your costs. These will be divided into two types, fixed and variable:
- Fixed costs: the expenses you have to incur regardless of the product, and which remain the same regardless of the number of products you sell.
- Variable Costs: The expenses you have to pay for sourcing, shipping, and promoting your products.