To learn how to get the unit price of the products we sell, it is necessary to have a good control in our business. It also allows us to create sales promotions and interesting pricing strategies for our customers.
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As entrepreneurs and business owners, it is very valuable that we have a defined pricing strategy that allows us to measure profits and costs in order to have financial health and continue to be profitable.
In this article I will show you how to get the unit price of your products and I will tell you about the difference between unit sales price and unit production cost. I am sure that with this information you will have new ideas for your sales strategies.
What is the unit selling price?
The unit sale price is the amount of money that a person will pay for each unit of a certain product or service.
This value is very important for the buyer since it allows them to know exactly what each item or product they buy costs; and for the seller because it gives him an idea of the production cost of a certain product.
The unit sale price must be indicated on the tickets or invoices that are issued when making a purchase-sale and it is the value indicated before applying taxes or discounts. It is useful to understand how much you pay for each product when buying in bulk or different items on sale and discount.
Unit sales price vs unit production cost
Now let’s talk about the differences between the unit cost of production and the unit price of sale. In the first place, we will say that one is the price that the final consumer will pay for a product and the production cost is what it costs us as sellers to produce or put a product on sale.
The cost of production is calculated according to two types of costs, variable and fixed.
The variables are those that are not always the same in the period of time in which you are going to produce, for example:
- raw material prices,
- Workforce cost,
- Costs of use of machinery,
- Equipment maintenance cost.
Fixed expenses are those that you can contemplate within your established period of time as something that yes or yes you must cover for your production, for example:
- Taxes,
- Rent of a premises,
- Web domain,
- Insurance.
And in the case of the unit price, we are going to calculate or establish it according to other factors that we will address later, however, it is necessary to comment that the cost of production is one of those factors to be taken into account in the
How to get the unit sale price of a product? (free template)
It is calculated by adding all the expenses necessary to produce or market your products and dividing it by the number of goods or items that you are going to produce or put on sale. External factors such as the market and the competition must be taken into account in order to obtain the prices of each product.
📝Note: Remember that this calculation is made taking into account a specific period of time.
I make the clarification about producing or marketing because you will not always be in charge of production and you may have a buying and selling business or through . Whatever the case, you can get the unit price of your products to get better profits and be profitable.
That is the simplest formula with which you can get the unit cost of your products and start selling them, however, as I already mentioned, it is necessary to calculate your production costs well, and take into account other external factors so that you can set prices in the best way.
Here is a small list of steps that will be useful to you.
- Take out your production costs or take into account the cost at which you buy.
- Get the operating expenses you need to market your product.
- Consider the costs of selling your product.
- Take into account the advertising and marketing expenses that you are going to invest.
- Think about allowing your customers to buy more than one product.
To make it easier for you, in Tiendanube we have a free template with which you can easily. Click on the link above or on the banner below and download it right now.
Importance of the unit price in your sales
As I explained above, it is important for a buyer to know the price per unit of what they are buying to understand how much they pay for each item.
As sellers it is useful because we can create promotions and even base ours on the real value of each item we sell and thus understand how much profit can be generated in your business.
To summarize, these five key points will help you understand why you should know the unit price of your products:
- It is useful to know how much profit you generate in your business.
- You will know the minimum value at which you can offer your products to be profitable.
- You can be competitive according to the market.
- It will encourage you to create sales strategies by package or through promotions.
- You will have the opportunity to grow with your business by knowing how profitable it is.
These are just some points that make it important to get the unit price of your products, which work regardless of whether your business is physical or you have an online store.
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Conclusions
To get the unit price of your products, you must take into account the factors that we have discussed in this article, but you must also have a strategy when setting your prices.
I recommend that you carry out these strategies based on a market study and thinking of yourself so that you can obtain better results.
I invite you to know all the templates and materials that we have for you in our . They are free!
If you still do not know the advantages that Tiendanube has to create your own online store, use it and see everything you can achieve by selling online.
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