How to calculate the sale price of a product?

One of the most exciting, yet stressful aspects of e-commerce is knowing how to calculate the selling price of your products.

Pricing is both an art and a science that requires an experimental attitude, along with large doses of intuition.

☝🏻 What it’s all about is pointing out how you want your brand and, by extension, your products to be perceived in the market.

Despite what is often thought, a low price is not always recommended.

You may generate thousands of sales, but if that drags on over time, you may end up going through difficult times, since you will not be able to cover your expenses at the end of the month.

And even more important, if your store operates in a price-sensitive market, then what are you going to do?

Make sure you have one or more profitable products wide and find out how to calculate the best-selling price. How To Value A Business? Advanced Concepts For Adding Value

How to calculate the unit sale price of a product?

Imagine that you sell clothes in your Shopify store.

If you don’t want your online store’s budget to deviate too much, you will have to learn how to price the clothes you want to sell in your e-commerce. How To Value A Business? Advanced Concepts For Adding Value

Elements that you must take into account to calculate the costs

Before knowing what percentage is put on clothes to sell in 2021, you must be clear about the cost structure of the products you sell in your online store.

And once you know which are the main items that have weight in the unit sale price, you can make the appropriate calculations.

Without intending to be exhaustive, these are some of the most common costs of an online store:

  • Product cost: Unless you manufacture your products yourself — in which case you should record the prices of the raw materials you use — it is normal for you to buy a product wholesale, and then resell it for a higher amount to private customers. That is why you must know precisely what the unit price of each product is.
  • Salaries: whether you have workers or if you are alone, it is essential that you record the amounts that every month you must allocate to pay the salaries of your employees (and your own salary).
  • Advertising: if the traffic to your store comes to you thanks to the Facebook advertising that you post every month, the expenses that these ads entail must be counted as a cost to be taken into account when calculating the sale price of your clothing store.
  • Payment tools: if you use payment platforms such as PayPal, remember that they will charge you a commission for each operation. Well, that commission should be taken into account when you are analyzing how to put a price on the clothes you sell.
  • E-commerce platform: The monthly fees that you pay to be able to enjoy the services of Shopify or the e-commerce platform that you have chosen are also costs to consider when you are calculating the price of your products.