You do not set the price.
The buyer does.
Pricing policies and price list construction: from the price the market accepts down to your margin, through the whole supply chain. Margins and volumes, product mix, campaigns.
The markup
myth.
You start from the cost, apply a percentage, and out comes a handsome, generous price. The calculation adds up — but only on paper, because nobody has verified that price except the person who set it. It is a virtual markup: it exists in the price list and not in the market.
When the price reaches the person who has to buy, the real factors — competition, channel, perceived value, buying habits — do not accept it. The result is not that you are not selling: it is that you are not being bought. That is not a nuance, it is the right point of view from which to look at the whole matter.
When to act
- The price list is built on costs and not on the market
- You sell but the margin is not enough to make a profit
- Every discount is decided case by case, without a rule
- You do not know which products make the margin and which consume it
- The retail price is out of market and you do not know where it is lost along the chain
- A launch or a campaign is coming and the right price is missing
From the consumer
to the price list.
We start from the end: from the price the consumer accepts to pay. Then we work backwards along the supply chain to your margin — even when the final consumer is not your customer. The perspective stays theirs: that is where the product gets bought or left on the shelf.
The price the market accepts
The whole chain
Margins and volumes
The mix, not the product
Margins used as leverage
The selling model
A price both ambitious
and buyable.
A price list built on the numbers and on the market together, where you know which product brings the margin and which brings the volumes, and where every discount follows a rule instead of a negotiation.
Price decides the success or failure of a product more than almost any other choice, because it sets perceived value — and it is not the seller who sets it: it is the buyer. From there come the margins, from the margins the volumes, and only at the end the profits.
The questions
about the numbers.
How do you calculate the selling price of a product?
What is the contribution margin?
Why is a high markup not enough to make a profit?
The loop
Cost reduction and margin recovery
Entrepreneurial and managerial training (the loop starts again)
30 minutes. No commitment.