How is the price of a product quoted?

Have you ever found absurd the “abusive” price of that piece of clothing, and told yourself in advance that the store owner is profiting from the horrors of clothing sales. But is your intuition correct?

How is the price of a product defined?

It may even seem like the prices stipulated by a store are unfair and we are literally being “stolen,” however, we must take into account the expenses paid by the store owner that we can not even imagine. Factors such as inflation and seasonality greatly influence final prices.

So here we are going to address a means of calculating how much a product will charge for, taking into account only the costs and the profit margin.

The owner of the store, besides paying the direct cost of the purchase, also has to pay for the indirect costs of the trade, they are:

– Rental of the store;

– Electricity and water;

– Commission to sellers;

– Taxes on the sale of goods;

– Rates of credit card machines;

– Freights;

– Eventual losses (checks without funds or theft, for example), etc.

But the expenses do not end there

But the expenses do not end there

While there are products that bring profits to the shopkeeper, others get “micados”, that is, stopped in the store, then, the owner ends up “profiting” equivalent to the amount that loses.

On commemorative dates, a market study is usually carried out to understand how much sales will rise and based on this to assemble the stock. In this example, if the store is too stocky and does not sell, it has a lot of losses, however, if you stockpile less, in addition to not taking advantage of the opportunity to profit, it will lose customers through negligence. It may not seem like it, but a percentage of these costs goes into the price set on the garment.

In addition, the marketer needs to calculate the profit margin of a product, key step to “make the business spin”, however any mistaken analysis can take your business down. A very high profit will make the competition more attractive to the consumer, so the alternative for the shopkeeper is to take a peek at the prices of neighboring commerce and apply values ​​close to his.

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David Davis