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Setting your price requires knowing who your customers are and what they are willing to spend on products like yours. It is vital to know your cost of production per item type since pricing below that will mean marketing at a loss. It also requires knowing your competition. You already have a vital piece of the puzzle for determining price from your earlier market research.
Customer demand. How many units of your product can you plan to sell over the production season? The demand for your product is driven by consumers tastes, consumer income, and the availability of other products like yours at different prices. What are your competitors charging for products or services similar to yours? Assess how your offerings measure up in terms of quality. Customers almost always do quality comparisons before they buy. If you only determine your competitor’s price and then charge a little less, it’s no guarantee of success. Being the lowest priced product on the market could create just the opposite effect, because for most customers, buying a product isn’t just about price, but rather about value. These are competition-oriented approaches to pricing that you’ll recognize:
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