Retail Price is one of the four main factors that go into determining a good Marketing Mix for your product and the most influential decision on sales and profit.
Your Retail Price is the dollar price distributors (Bike Shops) will sell your products to customers at. The distributor receives a percentage of the Retail Price and you receive the remaining amount, known as Wholesale Price.
Setting a reasonable Retail Price is of high priority and should align with your overall strategy, considering;
- The price sensitivity of consumers in your target segments (Market Information report), and;
- The price of the competing products in the Market (Market Summary report).
Setting your Retail Price
Once you have completed your analysis of the consumers in the market and your competitors, you can decide whether it is worthwhile to decrease your Retail Price in an attempt to increase units sold, or whether an increase in Retail Price is possible to increase product gross margin.
Your Retail Price must also align with the overall marketing and company strategy, for example:
- High Cost/Low Production Volume
- Low Cost/High Production Volume
- Medium Cost/Medium Production Volume
View the Market Summary Report, in comparison to your competitors does your product have low Awareness, low Quality, low Distribution, or low Delivery (or all the above)? If so you should price your product at the lower end of the market, if not and demand of your product is still average to high, then you can price your products at the higher end of the market.
Have a look at our tutorial video which demonstrates how to set your Retail Price in further detail.