The primary goal of business is to make a profit. Many small businesses fail to do so because they do not know how to price their products or services.
Pricing is the critical element in achieving a profit and is a factor that all firms can control.
Before setting your prices, you must understand your product's market, distribution costs, and competition. Remember, the marketplace responds rapidly to technological advances and international competition. You must keep abreast of the factors that affect pricing, and be ready to adjust. Retail Cost and Pricing A common pricing practice among small businesses is to follow the manufacturer's suggested retail prices. The suggested retail price is easy to use, but it can cause problems.