QUESTION 73
HOW DO I CALCULATE A SALES PRICE?
Why it’s important: Managers must recognise that they do not calculate sales prices – the interaction of supply and demand does that.
This is a trick question, but one that I have been asked many times during my career. So let me make it clear: The cost of an item plays no part in the setting of a sales price.
A sales price is determined by the interaction of supply and demand in the marketplace. Just because an item costs £200 to make does not mean that anyone will be willing to pay £250 for it. Similarly, a comic that cost less than 5 cents to print can sell for $1 million – just as Amazing Fantasy 15 (marking the first appearance of Spiderman in 1963) did recently.
The only role that a product’s ...
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