Entrepreneurs starting their own business sometimes find themselves in a difficult situation. You bought a trial batch of goods, but you still do not know your capabilities as a seller very well and do not know whether you can sell it in full, or some part will remain unsold. In addition to the ability to sell, at first, you will need to correctly set the price of the product.
Instructions
Step 1
To set the price, the concept of "price" should be decomposed into economic components. Structurally, the price of each unit of a product is the sum of all your costs:
• related to the implementation of activities (rent, taxes, utility bills, employee salaries, etc.);
• costs of purchasing goods for resale;
• also contains a certain percentage of the profit that you expect to receive.
Thus, if you manage to sell a certain amount of goods at a given price per month, then the month can be considered commercially successful.
Step 2
Next, you should decide on the margin. If we continue our example from the trade, then the margin is a surcharge to the purchase price of each unit of goods, due to which you will be able to pay related costs and make a profit. In the practice of retail trade, there are some averaged indicators of the value of margins, depending on the group of goods:
• Average markup for food is 25%;
• clothes and footwear - from 50 to 100%;
• Extra charge for small souvenirs and costume jewelry - from 100%;
• Margin for auto parts - within 30-60%.
Knowing these indicators, you can set the price for your product in accordance with the market.
Step 3
After the first month of trading, bring all your expenses and income into one report for yourself. If you managed to realize the planned volume at a good price, pay all the costs incurred and get, albeit a small, but profit, the calculation was made flawlessly. If you failed to achieve the planned result, analyze the reasons and, perhaps, you will slightly lower prices and be able to find what can be done differently and more efficiently.
