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My name is Chris, an Abuja based entrepreneur. Please I would like to be enlighten on the factors to be considered when placing a price for a product or service?
The factors include fixed and variable cost plus your desired margine
The geographical location is important, the price of a commodity in Lekki is totally different for the commodity in Oshodi. You need to know your target audience.
Hello Chris, the secret to pricing your products and services depends on 3 things:
1. Your business and personal income goals;
2. The value your products and services provide your customers; and
3. The type of customers you WANT to sell to
To add to the list already provided here
1. Landing Cost (location or no location, you can not afford to sell below cost price)
2. Competitors Cost (You need to research on your competitors cost of same products/services)
3. Also if you are a quantity type of person or quality type
(e.g in a tutorial center, would you rather have 20-30 students to pay N10,000/month
Or have just 10 students to pay N25,000/month) bearing in mind that if your price is higher than an existing competitor, this will have a negative impact on your patronage so you need to strike a balance here.
Interesting to see how SMEs can share knowledge with one another. Let's keep this forum moving!