As a Woodworker, you work with great care and pride. Many woodworking workers are often frustrated that their products do not get the price they actually deserve. As an entrepreneurial pricing product is a difficult but important issue to deal with. There are several ways to determine the price of a product, but it is best to choose a pricing model that is best for you.
Factors Affecting Pricing
You need to consider factors that influence your strategy before deciding on a pricing strategy. Product placement plays an important role in defining the strategy. If you put your products between creative masterpieces, the low price affects your image. If you are positioning a discount furniture manufacturer, customers always expect a low price, even for high quality products.
The market demand for the products sold determines the price that can be controlled by you. The best way to determine this is by doing some market research. Ask some viewers or customers what price they want to pay for a given product for three price points – Price X, Price Y or Price Z. If you want a large woodworking business, you can choose a research firm to carry out research on a larger scale.
It is also necessary to determine the cost of production for the wood processing to be manufactured. This should take into account fixed and variable costs. Building engineers are often ignored in their price calculations and have to consider the price.
The pricing strategy plays a role in short-term gains in creating cash flow or at the heart of long-term yields through increased market share. Reducing prices can increase revenue by selling more volumes. While this increases revenue and market share, you should become a patient to gain some profit.
Having reviewed pricing factors, you can use the most appropriate pricing model.
Cost plus model
This model first determines the cost of producing the item. This includes fixed costs, raw material costs and other costs. Then add a mark that you think is reasonable and which will give you a fair profit for woodworking. For example, if the cost of the raw material is $ 150 and the cost of production is $ 50 per unit, the cost can be $ 200 per unit. Based on current market conditions, you feel justified by using the 20% mark, so you add $ 40, so the final price is $ 240 per unit. With this method it is important to estimate the costs correctly and estimate the amount of merchantable products.
Returning to Investment Price
Behind the method, the expectation is to reach a price that allows the expected return on investment. For example, he says he invested $ 10,000 in the woodworking company and estimates it will sell 1,000 batches during the year and wants to replenish his investment within a year. It's worth $ 10,000 for the 1,000 units. This is a $ 10 profit per unit. If the cost of production is $ 80, it will cost $ 90.
Intrinsic pricing model
This strategy involves pricing the value of a wood product received by the product to its product. For example, if your client is an art deco home and excited that wooden furniture is just what we are looking for for months. Purchasing furniture can easily save $ 10,000 from all over the world for just the right furniture and shipping cost. You could easily charge $ 16,000 for products that cost $ 9,000. Although this is not necessarily a unified pricing strategy, this results in the best return.
Customer Psychology Pricing
The consumer believes the consumer believes that a clear positioning strategy is needed. If, for example, You are advertising a premium designer, then your products will have to be paid accordingly. Regular sales or price reductions can seriously damage the image. The reverse is also true. Also see the trigger price, for example $ 197, which is detected below $ 200. Customers also value their products. Customers who feel that furniture will never cost more than $ 3,000 will never buy $ 5,000 worth of items, even if the products give them $ 6,000 worth.
Although wood workers consider a number of factors in pricing products, external factors such as the state of the economy, lack of raw material supply and seasonality, non-control factors, and adjust the customer's prices are willing to pay.
Source by sbobet