The price of your product is almost always a driver of purchasing behavior. And with just a 1% drop in price producing up to an 11% increase in profits, it’s clear that finding that perfect number will be worthwhile.
The key to gauging the price of your product is market research and cost analysis. A business must calculate the cost of producing a product to determine profit margin, a measure of profitability. Essentially your price point minus total costs to produce one product. This will help you establish a suggested retail price. Market research will provide insight on where your product fits in the market and which products your competition will be. Keep an eye on their prices because surveys say 65% of shoppers make price comparisons with their smart phones when shopping in retail stores.
For more information on factors to keep in mind in finding that perfect price point and the difference in pricing when dealing with brick-and-mortar stores and the internet, check out the resource below.
