The task of determining the selling price is one of the most difficult for any enterprise today. The selling price is the price at which you sell your product / product / service. It depends directly on many factors: on the state of the market and average prices for similar goods, on the prime cost and production costs, on the purchasing power of the target group, on the number of competitors and the competitive strategy you have chosen. So how do you calculate the selling price?
Instructions
Step 1
Calculate your initial selling price using the formula:
CR = (C + P + A) + VAT
Where, Цр - selling price, С - unit cost of production / goods
P - planned / desired level of profit (profitability)
A - excise duty (if any)
VAT - value added tax
Decide on the level of income and profit that you want to receive in the planning period. Establish how much sales a given level can provide for you.
Step 2
Determine the break-even level, that is, the volume of product sales at which there are no losses or profits. This is necessary in order to understand, below which level of realization you cannot go. Break-even point = Sum of fixed costs / (price - variable costs per unit of output).
Step 3
Study the market. Find out the sales of your group's product. Find out prices for similar goods, works, services from your competitors. Find out what products are substitutes for the product you are producing. Conduct marketing research on customer expectations.
Step 4
Compare the initial (desired) selling price that you got by calculating with the prices of your competitors or with the level of customer expectations.
Step 5
Adjust the original selling price. Develop and install a discount system. Set a different price for different sales volumes. Build a graphical model. To do this, show the price on the abscissa and sales volumes on the ordinate. Build supply and demand curves based on previously obtained market research data (demand curve) and your own expectations (supply curve). Thus, you will find out the optimal selling price for your market.
