any one own / run a buisness?

sophie

for an econ paper i was supost to interview a local merchant to gain some insight as to how they operate and determine prices for their goods. i didn't get that done so i am hoping one or more of you will help me out.

what determines the price that you charge?

what determines when you change your prices?

are there any extra costs you incur by changing prices?

any additional information...


i need to write 1-3 pages about this so something more than 5 word sentences would be appreciated.

Payton

Ender

Wow, that's your econ paper...? Lucky...

My econ papers were more along the lines of reading doctor's dissertations and essays from political economy academia magazines and critiquing or analyzing them for anywhere between 7 to 25 pages.

sophie

this is for high school.

Payton

VR3

I cant sleep and I may not be qualified at all for these questions --

However, I have to do some of these on a daily basis.

what determines the price that you charge?

The market does, plain and simple. Particularly on accessories. On bigger items, the internet and chain stores really dictate the price, even though the manufacture dictates certain prices -- everyone finds loop holes. Most manufactures have something called a MAP pricing structure. This stands for Minimum Advertised Price. Any authorized dealer cannot advertise below this price.

However alot of companies will bundle things to beat this structure. In which case it gets harder to compete.

Where you make up that is in your accessories. At this point you have to get creative. The general idea on accessories for where I work is double your money. But sometimes the market in our area allows us to do more than that, in which case we sometimes quadruple + our money. These items also allow us to "discount" or throw them in on larger sells and not give away a ton of profit.

So while the manufacture dictates almost all of our prices, it is up to us what we charge. Some things you can get away with - other things you can not. It is a fine line.

Again, sorry if that is a bad answer.

what determines when you change your prices? The manufactures release new price books approximately every 6 months. They pretty much dictate when our prices change. This is of course solely on larger items.

Accessory items are a tad different. We receive a packing slip every shipment, in which case a net price is given to us. At this point we look at the previous net price, sale price, competition prices and update accordingly. The idea is to remain competitive. 100%


are there any extra costs you incur by changing prices?

I am not fully understanding this question. All I can possibly comment on, as prices go up for the consumer - obviously the price for the business goes up... although this wouldnt really be an "Extra" cost - but more so just more for the same product and the mark up would be the same...

Hopefully this helps -- almost time for me to go to sleep!

any additional information...

sophie

thanks sid i got the paper done. the last question would be like having to redo a billboard or something like that.