• Scorpion Bookkeeping

How to price your products

Bookkeeper Adelaide

Product pricing is a crucial business decision. Here are 4 factors you should consider when pricing your products.

Bookkeeper Adelaide

1. Your break-even point

This is the point where you are covering your product’s cost. If you price below this point, you’re making a loss, which is not sustainable.

Any price above this point on the other hand is profit, but you need to make enough profit on each unit and sell enough products to have a viable business.

Bookkeeper Adelaide

2. Check your competitor’s pricing

This is crucial, because your potential customers usually will. If you have any competitive advantage, you may be able to price your product higher.

If you don’t have a competitive advantage, you should price at the same level as your competitors (or cheaper if they have a competitive advantage).

Bookkeeper Adelaide

3. Price to reflect your brand image

Are you trying to position yourself as a high-quality brand in your market? If so and you have a high-quality product, you are more likely to be able to set your prices higher. You might be able to sell fewer products but make more money.

You can also choose the opposite strategy if you have a lower-quality product and price it cheaply instead, as long as you’re still making a profit on it. You may be able to sell higher quantities at the lower price, making more profit.

Bookkeeper Adelaide

4. Is your product essential for your customers?

If it’s just an optional item, pricing it too high will reduce your sales.

Bookkeeper Adelaide

How we can help

At Scorpion Bookkeeping, we can help you to implement Xero bookkeeping software to help you work out your break-even point, profit margins and more. We are a Xero-certified partner.

We can also provide your business with cost-effective bookkeeping support services. We service a diverse range of clients in South Australia, Victoria and New South Wales.

Contact us today for a free, no-obligation consultation to find out how we can help your small business!

6 views0 comments

Recent Posts

See All