In business, you’ll find similarities on a lot of things especially on products and services. This being the case, you will need to find ways on how you can set your prices properly. In implementing this, you’ll be able to offer good stuffs to your customers where they can have options to choose from. With similar products of different prices, any client can easily choose one that will fit his budget while getting what he really wants. Although this may sound quite easy, it can be tricky though especially to entrepreneurs who are new when it comes to setting prices. There are techniques to follow in setting up your pricing. A lot of data and figures are required in order to come up with a competitive price. As a guide, here’s how you can set good prices for products that are similar with other items in the market.
- Find the difference – you can always find something different or special on similar products. In doing this, you can set your prices from the differences or specialties of the two or more products. This can be quite easy as you can always tell which one is better than the other. If you are having a hard time looking for their distinction, you can always get help from a professional. A third person is in the best position to identify the variances. While you have to spend for this expert advice, the cost is just commensurate to the service that you need.
- Newer and older model comparison – aside from the differences, you can also set your price based on the product’s model. Newer models sell much higher as compared to the older ones. Although they may be similar in terms of usage and other factors, they are not the same when it comes to appearances and part components due to the difference in model. Set your price by carefully looking at their model. You should also do some research on the usual price of such products before you set them to avoid problems in the future. The economy of production for new models is also a factor that must be considered.
- Make an estimate of the value-in-use – although estimating the value-in-use of a product may be a very challenging and interesting task, it can help you set the price on similar products. In order to be successful in doing this job, it is essential to understand their economics properly. In such situation, you need to discuss the matter with your manufacturer who can give you the details that you need in order for you to come up with the right price. If you produce the item, the costing would be different.
- Utilize the manufacturing cost – another important thing to keep in mind as an entrepreneur is to base your pricing on the manufacturing cost of the product. Keep in mind that profitability is our main goal as businessmen. Thus it is essential for any entrepreneur to base his price on how much has been spent in making the product under consideration.
While the above guides are just some of the most common approaches used in this tricky aspect of your product pricing with similar items on the market, these can be of great help to you. You’ll be guided as you do your research on this subject.