Price monitoring: what should be taken into account when pricing new products?

If you want to add a new product or service, the most challenging step is likely the pricing process. There are many pricing strategies, but none that fit all types of products. Price is a complex indicator that constantly changes and depends on numerous factors.

We have gathered the key aspects you need to consider when developing a pricing strategy.

Content List

• Define Your Goal
• Determine Your Costs
• Conduct Research

Define Your Goal

A business without a clear goal will not achieve great success. Your first step is to clearly understand what you want to achieve from price monitoring. For example, increasing profit or market share with your product. It’s important to realize that price alone is not the defining factor in controlling the entire sales process. Therefore, evaluating your capabilities and minimizing potential errors is crucial.

Determine Your Costs

Before setting prices for your products, calculate how much you spend on managing your business. The second step is to cover your costs first and then think about profit. The cost of a product is not just the price of a specific item; it also includes other expenses. There are two types of costs:

• Fixed costs: These must always be accounted for, regardless of sales volume—rent, salaries, materials.
• Variable costs: Additional materials and labor, transportation.

Once you determine your exact expenses, you should set product prices high enough to ensure profitability.

Conduct Research

Your third step is price monitoring of competitors to set an optimal price for your product. For existing products and services, such research will help you understand whether your prices are competitive. The gathered information can be used to create a business plan, a marketing strategy, or assess an existing pricing strategy.

It’s essential to compare your prices with those of competitors and determine your profit margins. However, that alone is not enough. You need to focus on the revenue of each product—analyzing items separately.

Such analysis requires significant time investment. However, you can save time by using the PriceCop price monitoring service. This way, you will receive timely updates on competitor pricing changes and discover new pricing opportunities for each product. To improve profitability, you should align your prices with the benefits you offer to your customers.