Pricing - Yerukhimovich IL

7.6. Establishment of the final bid price for the goods

The goal of all previous approaches to pricing is to choose the most acceptable method for the commodity producer. In this case, it was meant that the company enters the market without intermediaries. Then the chosen method of pricing was the method of establishing the final price. If the firm uses the services of wholesale or retail intermediaries, it must consider a number of additional considerations before setting a final price.

As the goods move through the distribution channel, each participant, before reselling the goods to the next link in the chain of goods circulation, produces his own margin on it.

The commodity producer , studying the market of his goods, reveals the availability of demand for it and the price of demand, and then, taking into account the margins of intermediaries, is determined with the price of the offer, including its costs and profits.

Let's say that the company plans to launch vacuum cleaners and sell them in retail trade through intermediaries. Buyers are willing to pay for a vacuum cleaner 350 UAH. In the structure of the retail price, the share of the trade mark-up is 20%. Therefore, the wholesale intermediary will supply vacuum cleaners to the sales network at a price of 1 pc. 280 UAH. (350 (1 - 0.2)). His mark-up in this price is 15%. Then the price of the commodity producer is 238 UAH. (280 (1 to 0.15)). If the commodity producer has determined the share of his profit in the price of 25%, then its costs for producing the vacuum cleaner should not exceed 178.5 UAH. (238 (1 - 0.25)). Otherwise, it should either reduce the profitability of products, or take organizational or technical measures to reduce production costs.

7.7. Setting prices with discounts and allowances to promote sales

The prices initially announced by the commodity producer (in price lists, catalogs, offers - commercial documents, which are a statement of the seller on the offer of goods on specific terms) act as a starting point, are of a reference nature. They are offer prices. The actual price of the sale of goods may differ from the offer price due to price surcharges or discounts.

In the practice of pricing, many bonuses and discounts are applied, due to various reasons.

The main types of price discounts: for the size of the shipment; Quantitative; Bonus; Seasonal; Dealer; Special, etc.

With a significant volume of one-time purchase, discounts for the size of the shipment can be 15-30% of the initial price [17, p. 221].

Depending on the seriality and magnitude of the order for deliveries of mass production (especially for individual one-time orders), price discounts can fluctuate within 10-15%.

Bonus discounts "for the loyalty of the buyer" are provided to wholesale buyers. They are due to sales volumes within a year or several years and make up 7-10% of the turnover value.

Seasonal (temporary) discounts are applied for deliveries of products of seasonal agricultural production or seasonal goods (clothing, footwear, etc.) and are in the range of 8-20%.

Dealer discounts are provided to intermediary firms and offices, as well as dealers (intermediaries). They are established, as a rule, proceeding from the preliminary determined price of the goods and make up

20-30%.

Discounts for payment in cash or prepayment are called "konto" and are 3-5% of the transaction amount. In this case, when concluding a sales contract, the agreed conditions are formulated as follows. For example, 4/15, net 30, which means: if the buyer pays the price of the goods within 15, not 30 days, then they will receive a discount of 4%.

When intra-company trade within the regional groupings under special intergovernmental agreements, there are so-called closed discounts.

According to commercial practice, the total level of discounts from the initial price can reach 50-60%.

The most common types of price premiums are surcharges for fulfilling the buyer's special requirements, improved product quality, special performance, special delivery conditions, transportation, use of special packaging, etc.

Using price surcharges and discounts allows the seller to maintain a more stable level of production, improve the liquidity of the enterprise (firm), reduce costs in connection with recovery of bad debts.

The use of surcharges and discounts provides flexibility in pricing.