Trade price list template, Pricing is one of the most critical components of every level of business. Retailers need to keep their prices competitive to attract customers. Wholesalers need to offer prices in keeping with the industry standard in order to sell to retailers. Suppliers of raw materials have to keep their prices close to those of the competitors to remain viable with manufacturers. It’s a really simple concept. Any business or individual will seek out the lowest price unless there’s a good reason to not do so, such as quality or prestige. If an equivalent or similar good is cheaper, you will get the sale.
Because sellers understand buyers want the best price, one of the main pricing factors in our economy is competitive reaction to price. The price for a similar good or service tends to gravitate to a certain point as a consequence of this. While consumers often suspect collusion, this is usually not the case. Competitors usually have similar inputs, and they can easily discover each other’s prices as people are public information.
A business that knows its competitors are charging considerably more and getting away with it, they will raise their prices to take advantage of that demand. On the other hand, if a business sees its competitors cutting prices and accepting customers, it will drop its prices to maintain. A business might also employ an opposite competitive response to cost, like lowering prices when a competitor goes up. This would be done in the hopes of taking away customers that are unwilling or not able to pay the higher price.
Of course, there are limitations to the capacity of businesses to adjust their prices to the competition, because of the fact that there are pricing factors other than competition. If the costs of production go up industry wide, businesses will have no choice but to increase their own prices. An industry heavily dependent on transport, for example, will need to raise its prices because of the high price of gas. The current drought is driving up grain prices, which makes food more expensive across the board. Prices are also constrained by demand. If nobody is willing to pay a certain price, a business simply can’t charge that price. Check it out the sample of trade price list template below at the attachment page.