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Pricing strategy can spell the difference between success and failure | The Nation

IN general, pricing strategy is very important for retail companies in order to achieve their sell-through (the ratio of sales to beginning inventory over a period of time) target.

Customers may have acceptable price-points in mind for different brands. Thus companies should set the right retail price by taking into account the required margin, competitors’ prices and potential customers’ perception of the product.

Some companies need to adjust the retail prices once they find that they are too high in their customers’ view. Setting the wrong prices can lead to low sell-through ratios, which can end up with high stock carried forward. This stock will eventually become ageing inventory that needs higher discounts in order to clear it out.

For importers of fashion brands, the path to sales success continues from the purchasing process to the selling process. The following are key considerations for determining retail prices.

Historical sales analysis. It is necessary for the sales team to understand the sales performance at different price levels. Different product types will usually have different prices. For example, the price of a normal product is likely to be lower than for a premium product. The different price points can contribute differently to the company’s performance in terms of sales proportion and profit margin. This information is important for the management to make necessary decisions on sales and pricing strategies.

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Pricing strategy can spell the difference between success and failure.

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