One of the most important decisions that a business needs to make, is what to charge for their products. These decisions can be made in a couple of different ways. The first way is time and materials based pricing. With this type of pricing, the goal is to recoup the money spent on materials to make the product, as well as recouping the value of the time taken to make it. The other is market based pricing, which is based more on what people are willing to pay.
- One of the most important things a business needs to figure out, is what price to charge for their products.
- One way to determine how much to charge for your products, is to base it on recouping your cost for the time and materials needed to make the product.
- Market based pricing becomes important if people are willing to pay more than just the amount needed to recoup your costs for manufacturing the product.
“Market-based pricing, as the name suggests, is developing the price based on the value of the product from the point of view of the consumer and competition.”