Amongst the numerous problems that new business owners usually have to deal with, is the problem of setting the appropriate price for their goods or services. Price is a great determining factor in a business, when your charges are extremely high you really send away customers but on the other hand when your charges are low, you also lose money also and as a new business owner you neither want to lose money or customers as you want to save the both.
Economically, it is believed that the higher the price of a commodity, the lower the demand while the lower the price the higher the demand but from everyday analysis we can see that this economic term does not hold true all the time, there are some goods that definitely have more demand even as the price increases.
When there was a study about how customers tend to pick a price among various options, it was realized that so many customers will not want to go for a price that seem a little too high because they feel it is overpriced, if that same item cost too low as well customers will not want to get it because they believe it might not be original so it is undervalued but if there is a price that stabilizes in the middle, then most customers will want to go for that one.
Price is often interpreted to describe quality by a lot of customers, certain customers may never go for a product that appears too cheap because they consider it as being undervalued, the same way they will not want to go for an item that is extremely expensive because they appear overvalued, but there is a usual magic with an item whose price is just in the middle.
As a new entrepreneur, it is tempting to want to go for as low as offering customers almost free product or service with the intention and hope that the act will bring more customers to your door step but it does not work that way because the moment the new entrepreneur wants to increase its price and begins to make profit, those customers might feel the product is becoming overpriced and run.
New entrepreneurs need to have it at the back of their minds that they need the profit earned from the business to survive but they also need to keep customers also. When a proper market survey is done, look for a way to get a balance in between by setting a convenient price where you will make profit and gain customers also, learn to always remind your customers about the quality of your product.
In my opinion, I think the price of a product is directly proportional to the demand for that product. This is why, when a product is heavily demanded, the price tends to increase. Also, I think the availability of a product affects the price.
Nice read buddy. Cheers
You are correct @samminator that is q reason why some companies use the policy of scarce commodities to sell some of their products.
Hello @ojerinde
The price of the products and/or services offered must be studied on the basis of a market analysis, which considers supply and demand, the target market, among other aspects.
You certainly have to be very careful with the price you are offering to avoid misinterpretation by the customer.
Excellent read, thanks for sharing.
Have a great day!
Best regards.
Market analysis has a lot to say about the determined price of the market
It is a dilemma for the retailer to set prices if it is subject to the customer's perspective, but the value of the product should be the one that serves to cover his expenses and leave him with a profit.
Setting a perfect price for my goods was a major problem I faced when I started business and even up till now it has remained an issue I have to constantly battle with but learning should always be something we should do, I am happy to find a post that talks about it here.
Hello friend, I particularly think that the price should also be adjusted to the quality of the product, obviously without losses for the entrepreneur, I think that providing good quality products has a price, but obviously can not be an unaffordable price unless it is to sell to a small part of the population. I think there are many factors to be able to establish prices, competition must also be verified. Greetings!!!
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