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.
The demand of commodity is also very important when deciding the value of produce. When the demand is high the sells will be high too producers tend to hike the fee of their products to take advantage of high profit being reaped. When the sells is very low, business men reduce the tea value so has to encourage more people to purchase it.
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.
Tax has also been something many traders consider for a very long time. Different governments have different tax systems thus making some products more expensive in some parts of this world than the rest. The business men pass the tax imposed in their commodities to their final consumers by adding the cost of goods therefor when there are low tax rates the products will have a friendlier face value.
The purchasing power of consumers is also something to consider. Clients with high purchasing power tend to be willing to spend more than those with low purchasing power. Traders take advantage of this by hiking products meant for such people so has to increase the profit margin in every transaction. This increase the income of company in an amazing way.
Economics of scale also apply to many firms. Big firms enjoy economics of scale thus their products tend to be cheaper than those of small companies. This is because the small company incur a lot when producing one unit of product.
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.
The demand of commodity is also very important when deciding the value of produce. When the demand is high the sells will be high too producers tend to hike the fee of their products to take advantage of high profit being reaped. When the sells is very low, business men reduce the tea value so has to encourage more people to purchase it.
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.
Tax has also been something many traders consider for a very long time. Different governments have different tax systems thus making some products more expensive in some parts of this world than the rest. The business men pass the tax imposed in their commodities to their final consumers by adding the cost of goods therefor when there are low tax rates the products will have a friendlier face value.
The purchasing power of consumers is also something to consider. Clients with high purchasing power tend to be willing to spend more than those with low purchasing power. Traders take advantage of this by hiking products meant for such people so has to increase the profit margin in every transaction. This increase the income of company in an amazing way.
Economics of scale also apply to many firms. Big firms enjoy economics of scale thus their products tend to be cheaper than those of small companies. This is because the small company incur a lot when producing one unit of product.
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