Pricing

 

And so passed another week of accounting studies. This week our topic was pricing, which I found surprisingly interesting! I must say that the calculations are not my strongest suit but I do know how to ask the tough questions and find all the small details that need to be considered when pricing a tourism product. I also realized that this topic is close to my work at the moment as I am developing new experience products and have to figure out their pricing structure as well. How exciting!

Keeping in mind the mindset of profitability "your income being more than your costs" we had many discussions how to properly price your product. It is not enough only to balance out the costs but one has to also make profit. But are there any limits to pricing? In short, the lowest level of pricing is meeting the costs with the sales. Yet, the highest level of pricing is what your competitors are doing. So either pick something in between or challenge the competitors. ;)

Thus, pricing is where the competition begins. Moreover, you may decide to use your pricing as competitive advantage in your business strategy or highlight the quality of your product. Just, remember to calculate your break-even point in order to find out how much more you need to sell or price up your products in order to be profitable.

Cheers!