A price list is basically something that contains all of the prices of all products and services that a business provides to its customers. Every business owner knows that a price list could determine whether a customer or a client would want to purchase whatever their business has to offer or not.
Customers need these price lists to make sure that they know what they’re going to buy, as well as to help them see whether the prices of these products or services are justifiable, or if they should find another company to do business with. So if you plan on creating a price list of your own, then this article should teach you how to make one that will make customers want to buy as well as help you gain profit.
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How to Make a Price List
Creating a price list is just about essential for every business. You’ll need to remember that you and your employees need to make a clear set of prices that you can rely on. However, before you can set any prices, you’ll need to do a lot of research. So doing a marketing analysis, customer analysis, and even a cost analysis should help you determine just how much you should set your prices. So here are the steps that should help you make a proper price list.
For setting the price:
- Determine the cost of all of your goods. The cost of just about every single one of your products and services should cover all of the materials used as well as the human costs that factor into how they’re produced. Remember that some of these costs are fixed (such as equipment rent) or variable (fuel or shipping costs). So keep all of that in mind.
- Research just how much your competitors are selling their products and services that are similar to yours. While this may take some of your time (and possibly even some of your money), eventually it will pay off as the information the research will provide you with is valuable enough to help you stay ahead of your competition. There are lots of ways to do your research. Examples being that you can ask customers regarding their thoughts as to whether or not the price of the products and services of your competitors were fair. You can do this via a customer survey, online poll, customer comment cards, and much more.
- Think about the community your business is in before you start setting your prices. Marketing position is very important in the event that you have a lot of competitors. Some of the things you need to think about that helps you point out your position in your market are the kind of competition your business has, how customers will understand the relationship between the quality of the product or service and its price, who your target customers are, and much more.
- Make sure that you avoid underpricing. There are a lot of business owners out there who are tempted or have already lowered their prices than their competitors in the hopes that customers would buy more from them. However, this could backfire as the customers might think that your products or services are cheaper in quality compared to the rest and you might not be able to keep up with the cost to keep your business going. If you spend more than you make, then obviously your business won’t be going anywhere. Rather, it’ll be heading straight to the direction of bankruptcy.
- If you’re avoiding underpricing, then you should also avoid overpricing. If you set them too high, then you’ll just be making potential customers avoid your business and push them straight toward your competition. As a result, your business might struggle to make profit and you might not even break even.
Creating the price list:
- Make a list of everything that your business is selling. You’ll need to either have a proper product list or service list so that you and your employees would now what to charge. If you have other branches that sell different products, then you’ll need to create a separate list for them.
- You have to decide if your prices reflect either standardized or tailored prices. There are some businesses who set a price for all their products and services and that they stay the same no matter who buys them. Then there are those business whose prices are based on the kind of project and offer the customer an estimated price. In the event that you decide to hand out an estimated price list, then be sure that the customer knows the “worst-case scenario” regarding just how much he or she might spend. This is so that they won’t get shocked once they acquire the total price.
- Learn how to format your price list. A price list usually comes in a tabular form to make it easier for customers to view the prices of whatever they’re after. So each of your prices should be right alongside their respective products and services. And any other kind of information such as the cost of shipping or if the price of the item with or without tax should be included in the price list. It would also help if you arrange everything alphabetically, dividing the products into different categories, and even organizing all of the price list from highest to lowest amount or whatever suits your business style.
- After you have finally concluded the price of everything that you’re willing to sell to your customers as well as finalizing the price list, then it’s best that you share it with your customers. They’ll be able to appreciate the fact that they’re able to use it as a reference to help them determine what they would want to buy from your business. You may decide to share it through your business’s website or you can send it to your customers via e-mail. If you have customers who have become regulars with your business, then you’ll need to keep them updated and send them e-mails as soon as there are any changes.