Cost-based pricing strategy pricing strategies

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Cost-based pricing strategy is another of the most common pricing strategies.

It essentially involves working out a price for your products by adding the cost of the products themselves (including shipping costs) and the profit you want.

Of course, you will also have to consider marketing costs, otherwise you risk making sales without making any profit.

When creating cost-based pricing strategies for your business, there are two main things you need to consider.

The total cost you incur when making a sale and the profit margin you want to make on each sale.

So, let's use an example to show exactly how this pricing strategy works.

Let's say you are running an online women's clothing store and you are selling clothing.

You are dropshipping , so you don't have to worry about singapore email list production costs, since every time you make a sale you buy your products directly from your dropshipping suppliers .

You have a cost of $5 to purchase your products from your supplier and $2 to ship the products to your customers.

This comes to a total cost of $7.

Then set an additional cost of $5 per product for the Facebook ads you use to drive traffic to your online store and get a conversion.

So, in total you will spend $12 to purchase a product, make the sale, and ship it to your customer.

So far, it’s pretty simple. Next, you’ll need to decide how much each product will cost, to complete this pricing strategy.

You could try selling the shirts for $15 each, or even $20 each, and see if you can make a sale. With this pricing strategy, you could make a decent profit at either price.

You can also use a fixed markup percentage, that is, set a markup, for example 5% for each product sold. This way you know that the cost of producing, shipping and promoting your product will have to be increased by 5% to get a good profit margin.