Just because a company is involved in technology, doesn’t mean they have a futuristic way of figuring out how to run their business. They still have to carefully evaluate their options, and possibilities for profit. When it comes to calculating the costs of products, there are several methods a company can use before being ready to ship out their goods to the public.

Cost-Plus Pricing

According to Entrepreneur this is a common method used to calculate the cost of a product. Using the Cost-Plus method, you add up total labour, operation costs, and materials to make the total cost. Then you add your desired profit on top. It’s very important for a company to include the desire profit when calculating product cost, otherwise there’s a likelihood the retail cost will be set too low. If this is the chosen method, it’s important to constantly review costs as these will impact the price and therefore profit of the product.

Competitive Pricing

With the technological market becoming more and more saturated, competitive pricing is a good direction for some companies to steer themselves down. This way of costing can be helpful for many reasons. For one, if there is a common tech product for a certain price, a company knows how much they should be aiming to charge. If a tech company thinks they can sell more by selling them cheaper than the common price, this could be a strategic marketing move. If they go higher, they need to make sure what they’ve got has more to offer than the standard models already available.

Make Room for Marketing

An important part for any tech company when thinking of the cost of a product, is the cost of marketing. Unless it’s already a household established brand, like Samsung or Apple, a piece of technology isn’t going to sell itself. A company will need to allow room in the budget to pay for promotion of the product. This could be in a number of different forms: social media, viral videos or multi-platform advertisements. 

Postage Cost

Once it comes to posting the product itself, a tech company will want to make sure their product is delivered effectively and for a reasonable price. With the help of an online courier, such as Parcel2Go, they can calculate postage cost. This would be based on weight and value of the item. So depending on size and how high-tech the products are, both of these factors will impact delivery cost.