September 13, 2019

Pricing

Drew Bickel

Drew Bickel
Data Scientist/GOW Consulting

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The biggest art form in the business world is pricing.

Thank about how you price merchandise or services. Is it as simple as a standard formula it cost me x, handling is y and I want a profit of z. there you go all done. wait, what about carrying charges, your cost of overhead, markdowns, damage and defective, warehouse cost and each company has other and unplanned costs. so how do we factor those in.

first we must take a very granular view of our operation. what is the cost in basic sales ( salesman/woman, handling, competition pricing insurance, utilities, and others)? now you know to sell one widget it costs you. 

Next, what is the cost of the product? I assume all of the readers are great at negotiations, I am not but since you are getting the best price. Here is where knowing what your competitions is will help you. Also the bigger your Pencil the better deal you should get. so now you know the cost for you to sell the product and the cost of the product to your door you have two major pieces to the puzzle.

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