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Product Pricing Strategies

Effective pricing is one of the most challenging tasks of running a business. Not only do you need to figure out pricing that makes you competitive, you also have to balance it with the cost of  production and distribution while still making a fair profit.  The more information you have, the more easily you’ll be able to set your prices. This includes keeping track of product inputs and labor and understanding the real costs of selling through different channels - including your time.   

Some additional considerations:

 

  • Does your market have pricing guidelines in place that you need to follow?

  • Have you done some comparative shopping in your area to see what similar products are selling for? Have you looked at both retail and wholesale pricing? Visited local Farmer’s Markets, wholesale vendors and retail stores?

  • What are your market’s fees? Generally they are a combination of market fees, Local Orbit fees and payment processing fees.The fees are set by your market manager, who can let you know how they're determined.

  • If your market does have fees, you will not need to calculate anything. The system is designed to automatically configure the net price or sales price based on any fees determined by the market manager. We’ve done the work for you! Here is how it works:

    • Enter the amount you would like to earn from the sale of the product in the “seller net price” field. The “sales price” will automatically add any applicable fees.

or

  • Enter the amount you want the buyer to pay in the “sales price” field. The “net price” will automatically subtract any applicable fees. This is the amount you will receive when the product is sold.

  • Learn more

If you’d like to learn more about pricing strategies here are some helpful resources to make it easier to determine how to price your products.

  • Farmer’s Market Online includes information on setting prices for value-added products and services, cost-based pricing, estimating profits and retail pricing.

  • The University of Tennessee Agricultural Extension Service offers an a-z guide to business planning, market research, marketing & promotion strategies and pricing strategies.

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