The cost of goods is determined by different parameters. This things tend to change from time to time thus many products price will change in different times of the year. Iaso tea price has been changing because of different reasons.
Production cost differ from one commodity to another. The production cost mainly involve the cost incurred in the process of turning the raw material to a finished good. It include the cost incurred while purchasing the raw materials and also the bills the company need to pay after the all process this include electricity bill.
Demand for goods defer from one season to another. Merchants have a way of maximizing sells in different seasons of the year. When the demand of a product is high the company tend to drive down the production cost thus the profit margin will be high. When the demand is low the company will lower the value of goods so has to encourage more clients to try out their products.
Transport cost is also very important in this process. This mainly apply to the merchants who produce goods in one point of the globe and sell in the other. Transport cost can sometime be very high depending on the cost of oil which really counts a lot when it comes to transport. When less transport cost is incurred that means the cost of commodity will be friendly to the clients.
The way the other competitors have priced their commodities is also key to every company. When other tea companies have over priced their tea the other party will take advantage of that by doing so but slightly lower than the others. This is a strategy of attracting more people to try out their products.
Government regulation is key thing when calculating the face value of any commodity. This is mainly because if business men incur some cost in the process of paying different tariffs put in place by a government they will pass this cost to the consumers of the goods by increasing the cost of the commodity. In some cases other countries have special days with no tax mainly known has tax holidays. In search days merchants are able to import goods in a more friendly cost thus the low cost trickle down to the consumers by enjoying the commodity in a cheaper retail than the usual market value.
Different products are meant for different market groups. In cases where the group has bigger purchasing power the merchant will try their best to increase the profit margin because this group is always willing to spend extra cash when purchasing anything. In cases where the product is designed for people with low purchasing power the revenue is maximized by increasing the number of units being sold.
Economics of scale also count a lot. Many big firms have been able to drive their competitors out of market by using economics of scale. Big cooperation tend to enjoy low cost of products when compared to the rest of the institutions. Many of these huge companies can produce a unit of product with less than a half of what is being incurred by the small firms, thus a good number of consumers will get what they want in a more economical price.
Production cost differ from one commodity to another. The production cost mainly involve the cost incurred in the process of turning the raw material to a finished good. It include the cost incurred while purchasing the raw materials and also the bills the company need to pay after the all process this include electricity bill.
Demand for goods defer from one season to another. Merchants have a way of maximizing sells in different seasons of the year. When the demand of a product is high the company tend to drive down the production cost thus the profit margin will be high. When the demand is low the company will lower the value of goods so has to encourage more clients to try out their products.
Transport cost is also very important in this process. This mainly apply to the merchants who produce goods in one point of the globe and sell in the other. Transport cost can sometime be very high depending on the cost of oil which really counts a lot when it comes to transport. When less transport cost is incurred that means the cost of commodity will be friendly to the clients.
The way the other competitors have priced their commodities is also key to every company. When other tea companies have over priced their tea the other party will take advantage of that by doing so but slightly lower than the others. This is a strategy of attracting more people to try out their products.
Government regulation is key thing when calculating the face value of any commodity. This is mainly because if business men incur some cost in the process of paying different tariffs put in place by a government they will pass this cost to the consumers of the goods by increasing the cost of the commodity. In some cases other countries have special days with no tax mainly known has tax holidays. In search days merchants are able to import goods in a more friendly cost thus the low cost trickle down to the consumers by enjoying the commodity in a cheaper retail than the usual market value.
Different products are meant for different market groups. In cases where the group has bigger purchasing power the merchant will try their best to increase the profit margin because this group is always willing to spend extra cash when purchasing anything. In cases where the product is designed for people with low purchasing power the revenue is maximized by increasing the number of units being sold.
Economics of scale also count a lot. Many big firms have been able to drive their competitors out of market by using economics of scale. Big cooperation tend to enjoy low cost of products when compared to the rest of the institutions. Many of these huge companies can produce a unit of product with less than a half of what is being incurred by the small firms, thus a good number of consumers will get what they want in a more economical price.
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