Procurement notice: 13 methods for supplier pricing

Procurement notice: 13 methods for supplier pricing

A very important part of the procurement work is price negotiation, and the tug-of-war of bargaining with suppliers is even more annoying for purchasers. A full understanding of the price composition of the product and good cost analysis are effective ways to achieve success in price negotiations.

In addition, understanding some supplier pricing strategies and methods are more conducive for us to make correct response measures in price negotiations.

What are the supplier pricing methods?

01 Same price sales technique

There is a small shop in the UK, and the business was sluggish at first. One day, the shopkeeper had an idea and came up with a trick: as long as the customer pays 1 pound, he can choose one item in the store (the items in the store are all at the same price). This can be said to capture people’s curiosity. Although the prices of some products are slightly higher than the market prices, they still attract a large number of customers and their sales are higher than those of several nearby department stores.

In foreign countries, the more popular same-price sales technique is to sell at the same price in different counters. For example, some small shops have 1 cent product counters and 1 yuan product counters, while some large stores open 10 yuan, 50 yuan, 100 yuan merchandise counters.

02 Split method

There is nothing more sensitive to price than a customer, because the price represents the money in his pocket so that the customer feels that you only took a small part from his pocket instead of a large amount. Price segmentation is a psychological strategy. When the seller sets prices, using this technique can create a psychological sense of cheapness for the buyer.

Price segmentation includes the following two forms:

(1) Quotation with a smaller unit. For example, 10 yuan per kilogram of tea is reported as 0.5 yuan per 50 grams, 1,000 yuan per ton of rice is reported as 1 yuan per kilo, and so on. The Paris Metro advertised: “For only 30 francs, 2 million passengers will be able to see your advertisement.”

(2) Compare with the price of a smaller unit of goods. For example, “If you smoke one cigarette a day, you can order a newspaper every day.” “Using this refrigerator has an average electricity cost of 0.2 yuan per day, which is only enough to eat a popsicle!”

03 Extra high price method

Only a unique product can be sold at a unique price. The extra-high price method is to set the price much higher than the cost when the new product is put on the market so that the company can obtain a large amount of profit in a short period of time, and then adjust the price according to the changes in the market situation.

A shop in a certain place bought a small number of mid-to-high-end women’s jackets at a purchase price of 580 yuan.

The store’s operator saw that the jacket was very good in materials and workmanship, and the colors and styles were also very novel. It had not appeared in the local market, so he set a high price of 1,280 yuan for a piece, and it was sold out very quickly.

04 Low price method

Cheap but not good. Good goods are not cheap. This is the experience of thousands of years. What you have to do is to eliminate this prejudice. This strategy first sets the price of the product as low as possible, so that the new product is quickly accepted by consumers, and the priority is to gain a leading position in the market.

Because the profit is too low, it can effectively exclude competitors and make itself occupy the market for a long time. This is long-term battle bribery, suitable for some large enterprises with strong funds. For a production enterprise, the price of the product is set very low, first to open the market, to occupy the market, and then to expand production and reduce production costs.

For commercial enterprises, lower the sales price of goods as much as possible. Although the sales profit of a single product is relatively small, the sales increase, and the total commercial profit will be more.

05 Security Law

Something worth 10 yuan, sold for 20 yuan, on the surface is a profit, but it may lose a customer. For general commodities, if the price is set too high, it is not conducive to opening up the market; if the price is set too low, losses may occur.

Therefore, the safest and most reliable thing is to set the price of the goods relatively moderately, so that consumers have the ability to buy, and the sellers are also easy to sell. Security pricing is usually purchased from cost plus normal profit.

For example, the cost of a pair of jeans is 80 yuan. According to the general profit level of the clothing industry, it is expected that each pair of jeans can make a profit of 20 yuan. Then, the safe price of this pair of jeans is 100 yuan. Safe pricing and suitable price.

06 Non-integer method

A slight difference is a thousand miles away. This method of setting the retail price of goods as a non-integer with fractional endings is what sales experts call “non-integer prices.”

This is a price that can stimulate consumers’ desire to buy. The starting point of this strategy is to believe that consumers psychologically always feel that the fractional price is lower than the integer price. One summer, a grocery store-bought a batch of goods and sold them at a price of 1 yuan each, but buyers were not enthusiastic.

The store had no choice but to decide the old price, but taking into account the purchase cost, only reduced by 2 cents, and the price became 9 cents and 8 cents. Unexpectedly, the difference of 2 cents made the situation abruptly. Buyers kept coming and the goods sold out quickly. The salesperson was overjoyed and sighed, only 2 cents away.

07 integer method

The wind knows the strong grass, and a good horse is equipped with a good saddle. An American car manufacturer once publicly declared that it would build a large luxury car for the richest people in the world.

This kind of car has 6 wheels, the length is equivalent to two Cadillac limousines, the car has a bar and a bathroom, and the price is set at 1 million US dollars. Why do we have to set around the price of 1 million U.S. dollars?

This is because buyers of high-end and luxurious super products generally have a psychological desire to show their identity, status, wealth, and generosity. A luxury car of 1 million US dollars caters to this psychology of buyers.

08 Arc digital method

Although “8” and “fa” has nothing to do with each other, they would rather be trusted than nothing. It’s always right to meet the consumer’s psychological needs. According to foreign market surveys, the numbers used to price goods in booming shopping malls and supermarkets are ranked according to the frequency of their use, in order of 5, 8, 0, 3, 6, 9, 2, 4, 7, 1.

This phenomenon does not happen by accident. The root cause is the role of consumer psychology. Numbers with curved lines, such as 5, 8, 0, 3, 6, etc. do not seem to be irritating and easy to be accepted by customers;

Numbers without curved lines, such as 1, 7, 4, etc. are relatively unpopular. Therefore, in the sales prices of commodities in shopping malls and supermarkets, numbers such as 8, 5 appear most often, while 1, 4, and 7 appear much less frequently.

09 Classification

There is the price first, then the product, remember to look at the customer’s wallet pricing. French Chinese entrepreneur Lin Chang has a good fortune, and always considers the purchasing power of customers when setting product sales prices.

For example, the belts he produces are priced according to the high, medium, and low incomes of the French. Low-end goods are suitable for the needs of low-income people, set at around 50 francs. The material used is ordinary cows and sheepskins. There are more people in this part, so we will produce more.

High-end goods are suitable for the needs of high-income earners. They are set in the range of 500-800 francs. The materials are expensive, and there are python skins and crocodile skins. However, there are fewer people and less production.

Some exclusive valuable products are not priced at a ceiling, because for some people, as long as they like them, they will buy them no matter how high the price is. Mid-range goods are set at around 200-300 francs.

10 Adjustment method

Good adjustment is like lubricating oil. The Austen retail company in Wedmund, Germany, is very successful in distributing any product.

For example, when Osden just launched 10,000 sets of underwear for outerwear, the price was 4.5-6.2 times higher than the price of ordinary underwear, but the sales were still very strong.

This is because this kind of fashion has different wearing characteristics inside and outside in the past, and customers feel fresh and have a strong appeal. However, in May 1988, when the major cities in Germany launched a large number of such underwear outerwear fashions, Osden suddenly dropped the price to only slightly higher than the price of ordinary underwear, and it was also sold out.

In this way, after another 8 months, when the underwear outside the underwear is not so attractive, Osden sells it at a “cost price”. The price of each suit is less than 60% of the ordinary underwear. This kind of outdated clothing is still very popular in Osden.

11 Customary law

Seek change while not changing. Many commodities circulate in the market and have formed a well-known basic price. Generally speaking, this kind of commodity should not easily increase in price.

In our country, the price of matches is 2 points per box, and this customary price has been stable for more than 20 years. In 1984, matches in Hunan Province rose to 3 cents per box. For a period of time, local consumers would rather buy a small box of travel matches for 2 cents than the province’s matches.

But what if the production cost of the product is too high and the price cannot be increased? In fact, some flexible methods can be adopted.

For example, cheap raw materials can be used to replace the more expensive raw materials; you can also reduce the use of materials and reduce the weight. For example, make popsicles smaller and pack fewer matches.

12 Clear code method

Since ancient times, sellers have always offered prices and buyers have bargained. Is it possible to reverse it and let the buyer set the price first? For example, the price of a restaurant’s meals is always determined by the owner.

However, there is a “Milio Family Restaurant” in Pittsburgh in the United States. On the restaurant’s menu, there is only the name of the dish and no price.

Customers pay according to their satisfaction with the meal, no matter how much, the restaurant has no objection, if the customer is not satisfied, they can pay nothing.

But in fact, most customers can pay reasonably or even overpay. Of course, there are also those who pay less, even after devouring them, they don’t pay a penny and go away. But Na Bi Jing is only a handful.

13 Customer Pricing

Since ancient times, sellers have always offered prices and buyers have bargained. Is it possible to reverse it and let the buyer set the price first? For example, the price of a restaurant’s meals is always determined by the owner.

However, there is a “Milio Family Restaurant” in Pittsburgh in the United States. On the restaurant’s menu, there is only the name of the dish and no price. Customers pay according to their satisfaction with the meal, no matter how much, the restaurant has no objection, if the customer is not satisfied, they can pay nothing.

But in fact, most customers can pay reasonably or even overpay. Of course, there are also those who pay less, even after devouring them, they don’t pay a penny and go away. But Na Bi Jing is only a handful.

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