Finding the sweet spot in pricing isn’t a simple task. You can only go so far pricing all your products based on a fixed markup from cost. Product price should vary depending on a number of factors including:
- -what the market is willing to pay
- -how your company and product are perceived in the market
- -what your competitor’s charge
- -whether the product is “highly visible” and frequently shopped and compared
- -the estimated volume of product you can sell
Additionally, once you’ve taken all of these influences into account and settle on the most optimal pricing of a product, a hurricane will hit and your competitor’s place of business is destroyed or Kanye West starts sporting your signature leather jacket, or Celestial Seasonings opens a manufacturing plant in your town, creating 450 jobs which attracts 450 vegan transplants to fill these positions (who aren’t THAT excited by your all you can eat Texas BBQ chain).
Thanks for the words of wisdom, Elizabeth:)