Check what you’ve learnt
There are various ways to price your goods or services as you have seen. These were only a few - there are many more.
Pricing takes time and requires excellent record keeping skills. You should keep accurate records on how you arrived at your prices and what assumptions you have used so you can compare or use these in the future.
Accurate records will assist you greatly in tracking your businesses performance.
Listening to your customers and keeping an eye on your competitors should be an ongoing process, as this will assist you to review and calculate future price changes.
Paul decided that the best approach for his business was to use the cost-plus pricing strategy. He calculated the markup for his products and determined that he needed to markup his products by 100% in order to cover his costs and achieve his desired income and return on investment. Paul also did some calculations on markdown for slow moving stock, to ensure he still covered costs. He found he could markdown 25% and advertise this “sale” discount to move stock.
© RMIT University 2016