abhishreshthaa
Abhijeet S
Product Pricing:-
Approximate Manufacturing cost: 75% to 90%
Approximate Profit margin: 25% to 10%
Manufacturing cost includes:-
Cost of paper : 72%
Cost of inks : 0.5%
Cost of varnishing : 1.5%
Cost of lamination : 5%
Cost of pasting : 5%
Labor charges : 5%
Electricity : 4%
Others : 7%
(Approximate Percentages)
Pricing Procedure and Negotiations:-
Firstly, the customer provides the company with particular specifications, in which he requires his product to be made. Accordingly, a sample is made and its cost is calculated, adding to it the appropriate profits along with other expenses incurred.
Then an offer price is placed before the customer. If this price is approved by the customer then the contract is signed, but if not, then negotiations are done.
In negotiations, they try to check out where the prices can be reduced e.g., change in quality of paper or method of buying the paper (cash basis or on credit basis; buying paper is cheaper on cash basis rather than on credit basis). After this the two parties settle on a price and enter a contract.
In case the paper bought on cash basis, according to the agreement with the customer, the credit period given to the customer is reduced. Maximum credit period is 60 days and it reduces to 15 to 30 days in terms of cash payment.
Approximate Manufacturing cost: 75% to 90%
Approximate Profit margin: 25% to 10%
Manufacturing cost includes:-
Cost of paper : 72%
Cost of inks : 0.5%
Cost of varnishing : 1.5%
Cost of lamination : 5%
Cost of pasting : 5%
Labor charges : 5%
Electricity : 4%
Others : 7%
(Approximate Percentages)
Pricing Procedure and Negotiations:-
Firstly, the customer provides the company with particular specifications, in which he requires his product to be made. Accordingly, a sample is made and its cost is calculated, adding to it the appropriate profits along with other expenses incurred.
Then an offer price is placed before the customer. If this price is approved by the customer then the contract is signed, but if not, then negotiations are done.
In negotiations, they try to check out where the prices can be reduced e.g., change in quality of paper or method of buying the paper (cash basis or on credit basis; buying paper is cheaper on cash basis rather than on credit basis). After this the two parties settle on a price and enter a contract.
In case the paper bought on cash basis, according to the agreement with the customer, the credit period given to the customer is reduced. Maximum credit period is 60 days and it reduces to 15 to 30 days in terms of cash payment.