Pricing Your Products

In our scramble to find a way to offer the lowest prices on the Internet, we often overlook the basic steps that we should be taking BEFORE we even offer a product for sale.

We also overlook something even more important: you don’t HAVE to have the lowest price in order to make great sales. Following are some things I do before and after determining my bottom line. I sell by having products drop-shipped for my sites, which works VERY well, but these steps should be covered no matter your distribution method.

Should you be selling this item now?

Snowboards don’t sell well in the summertime. You may have a hard time moving a pair of roller blades in January. Don’t waste your time and your site space marketing products out of season. Ask your supplier for a little historical information regarding the best time to sell their products. Believe me, to everything, there IS a season. They have the figures. If they don’t want to share this info with you, find another supplier.

Identify your costs

Profit isn’t just the difference between wholesale and retail. You have other costs to consider. Think about every penny you spend in order to get that product to the customer’s door, and plan accordingly. For example, your merchant account probably costs you about 2.2% plus 30 cents per transaction. On an item you’ll sell for $20, that’s 74 cents. Don’t forget that calculation when pricing the item. Are you warehousing the item? How much is that space costing you per item per month? Did you spend money stocking up on shipping materials? How much per unit? What about advertising? Monthly hosting costs? You may need to project some estimated sales in order to arrive at some of these figures.

This may seem very complicated, but it’s really not. Just take the figures one at a time, and you’ll arrive at a wholesale cost plus an amount that, when added together, becomes your initial ESTIMATE of “cost of goods sold”. Identifying all your costs is critical if you want to price your products properly.

Check out the competition

Search on the item you plan to sell. Check out the competitors’ prices. But DON’T get caught up trying to beat the wrong competitor. You need to stay within your “venue”.

My stores are built in Yahoo Shopping (http://store.yahoo.com). 90% of my traffic comes from there. When I seek out my competitors, I look for other businesses like mine ONLY in Yahoo Shopping. Then I compare.

If I’m thinking about selling a product, and I get 1,500 hits in 400 stores on that item in Yahoo Shopping, forget it. If I get a hundred hits in 20 to 40 stores, I’ll look into it further.

So check out the competition, narrow down your product list, make a note of the five lowest prices you find, and then ask yourself another question:

Is anybody going to buy this thing?

This doesn’t have much to do with pricing, but it should be said.

When considering products, there’s unique, and then there’s too unique. Yak Cheese may sound like something that nobody else has for sale on the ‘Net. There’s a reason for that. If you sell more than 3 boxes a year, I’ll EAT some.

Unique is Rain Barrels made in Maine. It’s Exotic Cheeses imported from Italy. Silk Parisian Lingerie. Things you don’t see every day, but would be proud to give as a gift.

Then there’s “common”. Everybody and their grandmothers are selling Alabaster Figurines on the Internet. Do they sell? Sure, in a limited fashion. Do you want to sell them? Not if you want to make any real money.

In my experience, unique products, like Rain Barrels and Parisian Lingerie, DO sell. So do Coleman Sleeping Bags, and Conair Hair Dryers. BRAND NAMES sell. Look at your potential product, and ask yourself honestly if YOU would buy it on the ‘Net.

Set your price

Take the five lowest prices you collected on a product in your list that has survived the above. Calculate your estimated cost, then subtract that from the lowest price. If you don’t see at LEAST 15% profit, don’t bother.

If you do, there are a couple of ways to proceed. You can undercut the lowest price in your “venue” by a bit, and hope to “kick off” the product and get yourself noticed. Chances are, though, that the following week you’ll find that someone has undercut YOUR price by just a bit. That becomes a losing game.

I generally set up a couple of “loss leaders”. These are desirable items (in my general product line) that I sell dirt cheap just to bring in customers. Then I price the rest of my products at the second or third lowest price in my venue. The customers come in for the loss leaders, and then I can market everything else to them via email. I spend a lot of time making my site look better and easier to navigate, and pay a great deal of attention to my customers.

That makes me more reputable in the eyes of the customer. You’ll find that people don’t mind paying just a little more if they feel comfortable in your store. They don’t like to worry that they’re buying from a “hack” who may not deliver. Nothing says “hack” like a cluttered, confusing storefront.

Follow up

After you’ve sold an item for a month or two, revise that “cost of goods sold”. Measuring past performance is just as important as setting the correct price to begin with. If sales drop, recheck your competition. If that’s not it, drop the product, or shelve it until the “season” comes back around. Don’t get sentimental about your products, and NEVER just let your store sit there in limbo once it starts to make money. This is a dynamic business; stay on top of it!

A last word (or three)

Retail pricing on the Internet is so fraught with permutations that it would be impossible to cover everything here, even if I KNEW everything. The steps above are just the basics of a process that works for me. Hopefully something here will strike a chord and work for you as well. Patience and persistence are the keys to a successful Internet business, so hang in there, and don’t quit the day job for at least a couple of weeks. ;o)

I hope this helps in your future marketing decisions.

All You Need to Know About Production

The objective of any business firm is to maximize the difference between total revenue and total cost. This requires among other conditions that the firm purchases and combines factors inputs in such a way that the total cost of producing any particular level of output is the lowest possible figure, given existing technological and institutional conditions. The word production means manufacturing.

Production in the wide sense includes other activities that do not imply manufacturing of physical commodities. This is because the manufacturing of such commodities will be useless until they get to the consumers who need them for their satisfaction. This includes the process of getting goods manufactured to the final consumer such activities includes transportation, distribution and marketing. In addition , services which does not involve the “creating” of physical goods but which goes into adding to the satisfaction or utility of human beings are included in production and all these lead to the satisfaction of consumers and therefore, they are all part of production. A production process is the set of all activities that are required to convert a set of inputs (human resources, raw materials) into desired output such as finished products and services. Production therefore is the conversion or transformation of input into desire output.

WHY YOU MUST UNDERSTAND THE KEY ASPECT OF FACTORY PRODUCTION

There are major key aspects or let me say types of production namely: job production, batch production and flow production. It is possible that these keys speech of production are utilized in a factory at different stages of the production of a product. JOB PRODUCTION: is the manufacture of a single complete unit of a product by an operative or a group of operatives and a number of such products can be worked upon simultaneously by different groups of workers. Each group of workers will complete work on the unit before taking up another.

BATCH PRODUCTION: batch production requires that the work on any product is divided into parts or operations. And that each operation is completed through the individual units making up the batch before the next operation is under taken.

FLOW PRODUCTION: is the processing of the materials continuously and progressive. Thus, their is no idle time as in batch processing since work is complete on a unit at a stage of production, it is moved on to the next stage without waiting for the other Items in the batch. It is necessary each operation or manufacturing stage is of equal length, and there is no moment off the production line; inspection is located within the flow production line and the inspection function does not occupy more than the unit operation time, all stages are balance, the correct material, plant and equipment is provided on time and maintenance is by anticipation not default.

SEE THE TYPES OF GOODS IN PRODUCTION

The goods in production can be classified in various ways, such classification includes: capital goods, consumer goods, durable goods and non-durable goods.

CAPITAL GOODS: these are goods needed for the production of some other goods such as machines, equipments.

CONSUMER GOODS: are those goods that are needed for the satisfaction of immediate wants, such as food stuffs.

DURABLE GOODS: these are goods that can last for a long period of time and can therefore be used as many time as possible such as furniture, electronics.

NON – DURABLE GOODS: these are goods which have shot life spam and can therefore be used probably only once or a few number of time such as raw materials generally.

KNOW THE PRODUCTION FUNCTION

Supposing the maximum amount of any production that a firm can produce with any given collection of factor input is determined by prevailing institutional circumstances and by the existing state of technical knowledge. The relationship between the inputs and the outputs is expressed symbolically by a production function of the general form Q=F(V1 V2 Vn) where the variables V1 V2. Vn represent quantities of various factor input and the variable Q represent the maximum output that the firm can produce with a giving set of the input variables. It is assumed that the effect of an increase in any of the input variable is at least up to some limit to increase output. It is also assumed that the proportions in which various factor inputs can be combined to produce a given quantity of output are normally variable. Cases of fixed proportions (at least among ingredients) are found in certain chemical processes; but otherwise, experience indicates that input proportions can be varied significantly with output at a constant level.

FIND OUT ABOUT PRODUCTION LIFE CYCLE

The essence of successful new product introduction of simplification may lie in the appropriate timing of the action. The characteristics of a generalizing product life cycle. The product life cycle is an important tool for analysis and planning of the market activity, it shows the trends in sales and profitability of a particular product over its life cycle. This life spam further has clearly separate stages just like the life of an individual human being.

SEE MORE ABOUT STAGES IN THE PRODUCTION LIFE CYCLE

There are four major stages in the production life cycle these are: introduction stage, growth stage, maturity stage and decline stage.

INTRODUCTION STAGE: this stage will be dominated by the need to establish the product in the market by building buyers and distributors’ awareness of the product and its benefit, consumer advertising and trade promotions will be important in this initial communication process.

GROWTH STAGE: once successfully established, the new product may begin to enjoy rapid sales growth which along with the lack of competition may make this the most profitable stage of the life cycle of the product. The growth stage should be managed so that a full demand base is built in market; there is selective building of customer demand at the expense of existing or substitute product types marketed by competitors.

MATURITY STAGE: it is essential to company profitability and cash flow that , the stage be prolonged for as long as possible for well established products and brands this should be a time for consolation in the market place is mainly concerned with market share, so critical marketing activities need to be managed. To maintain product distribution and customer access to the product, to maintain customer loyalty to the brand or product and hence the race of re- purchase.

DECLINE STAGE: ether for reasons of technical obsolescence, changes in customer or Trade attitudes towards the product over familiarity with it or the emergence of a better product elsewhere in the market; a stage may be reached when sales and profitability start a consistence and perhaps irreversible decline. Once management has recognized and accepted the inevitable, he should withdraw all expenditure on the product above its variables cost of production, and perhaps raising its price.

SEE THE PRODUCTION FACTOR:

Production factors are the agents, inputs or resources used in the process of production. Without such factors, productions may not be possible. However, it is not production factors themselves that are of much importance but the services that such factors could render in production. These production factors includes: land, capital, entrepreneur and labour.

LAND: is the earth and all the natural resources found in and on it. Such resources includes: forest, rivers, minerals and even it includes such thing as sunlight. Land is the final source of all materials because any commodity can be ultimately traced back to the land. The reward of land is rent. The term land is used in the widest sense to include all kinds of natural (as distinct from man-made) resources.

CAPITAL: could be as all forms of wealth that are set aside for the production of further wealth. Thus, capital represents the collection of wealth that are not needed for immediate consumption. Capital is also described as a derived factor because capital has to be produced before being used to produce commodities.

ENTREPRENEUR: is a person who initiates, organizes, control and directs the process of production and bears the resulting risk in the production process. An entrepreneur is the business organizer and the one who combines other factors of production for maximum output. The shapes of the curves in this figure are based on a normal distribution. The actual shape of the curve and the length of duration of the four constituent stages will of course, varies for each production or brand.

Useful Hair Products

There are made to help people with their concerns. Whether it’s general care or styling issues, these products help us boost our confidence by styling our hair or simply by making it manageable and healthy.

This products such as shampoos, conditioners, hair dyes, gels and loss solutions are highly popular in the market.A shampoo is one of basic that are readily available in the market. It’s a detergent that removes oil, dirt and prevents dandruff caused by outdoor pollution. It’s a general product that is needed for one’s daily bathing activity.

Redken shampoo is among the top 10 best shampoo products based on surveys. All Soft Shampoo is one of its products. This shampoo offers advanced “silkening” solutions that can transform dry and brittle to soft and manageable hair.

A products conditioner is another type of commonly used that compliment shampoo products. This is a great help for maintaining healthy looking hair.Some hairs are generally fizzy or too dry due to too much exposure to outdoor pollution. When products dries, it becomes brittle and it easily breaks. If you don’t treat it right away, it will reach the follicles and would result to falling hair.conditioners help fix greatly damaged by keeping it moisturized.

Daily Color Enhancing Conditioner – for Gray to Silver shades, Sterling to Snow is a product of Pantene, one of the leading manufacturers. It specializes in restoring vibrant shine to your silver, white or gray hair. This conditioner uses Pantene’s Pro-V solution to rid dull issues and let your grow shiny and healthy.

Hair dyes are also popular products. It is mostly used in parlors. Hair dyes are used to alter the original color of the products and are commonly used by many aging people to hide their gray hair. These products are also made available for hair color fashion statements.

Crabbe and Wylde Botanicals are organic henna products available in the market. Using a natural ingredient – the Lawsonia inemis shrub, it can produce a vibrant red color dye finish. Crabbe and Wylde Botanicals are sold in packs in different quantities.

These various are commonly found in every kind of regular kit. Shampoos, conditioners and hair dyes are the basic products that help keep our healthy and feel good and look beautiful.