Price right

Pricing can be both a source of significant financial risk and a part of the solution.  Pricing too low or too high can severely impact sales and the viability of your farm business.  Determining the right price can be challenging especially for smaller producers given the difficulty in establishing costs, proliferation of similar items in the marketplace and tendency to be ‘price takers’.

The right pricing strategy is essential to ensure that revenues exceed costs and the owners are receiving an adequate return on their equity and for their risk.  The right pricing reinforces the marketing goals for your business, whether they are market creation, development, penetration or differentiation.   Incorrect pricing can be a problem unto itself and can also be an indicator of other challenges in the business – labour costs, efficiency and use of fixed

Your pricing strategy should consider
1.  Costs (e.g. operations, overhead, equipment, depreciation, marketing, etc…)
2.  Wages (for yourself and your employees)
3.  Profit (how much you want to earn per sale)
4.  Competition (what are competitors charging, Are your costs different?)
5.  Demand (customer interest, motivation and priorities)
6.  Intangibles (brand, image and reputation)

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