A Step By Step Guide on How to Price Your Produce
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One of the most challenging tasks for the direct-market Kenyan farmer is setting prices. There is no one source that can provide you with pricing guidance. However, if you want to turn a profit, you must know how much to charge for your goods. I'll discuss some of the pricing strategies utilized by other Kenyan farmers in this part and point you in the direction of additional reading on the issue. I'll start by talking about price for retail outlets like Kenyan farmers markets and your own farm store before moving on to the trickier topic of pricing for establishments like restaurants, grocers, and other wholesale accounts. But first, a few words regarding your cost of production, which need to be your top priority when deciding how much to charge for any good or service.
Step 1: Determine your production costs
Step 1: Calculate your production costs verify that you have covered your operating costs by analyzing your cost of production. To ascertain your manufacturing costs, consult your prior year's income statement and expenses.
Step 2: Determine the right price
Step 2: Establish the proper pricing Estimate the production expenses for each crop to determine the break-even price for each commodity. Divide the anticipated output by the total cost of each crop. Selling above break-even should be the goal of your sales approach.
Step 3: Keep an eye on market development
Step 3: Monitor market growth • Familiarize yourself with the suggested price direction for your goods. Make sure you keep an eye on the Kenyan market and price changes because factors influencing the market now might not have an impact on it tomorrow.
Step 4: Plan sales according to cash flow
Step 4: Create a sales plan based on your cash flow Depending on your debt obligations, you may need to transport or store grain. Stock, for instance, can be kept in storage during a period of low pricing until the market changes and prices rise. Costs associated with storage should be taken into account as well.
Step 5: Make adjustments where necessary
Step 5: Adjust as necessary Flexibility is crucial for effective market strategy. It could also entail seeing a deal through from choice to completion or offsetting a previous option position that was later found to be a poor position.
Step 6: Balance Supply and Demand
When you get to the market and discover that you are the only farmer with, let's say, delicious cabbage or melons—which are frequently in high demand—your product gains value and you might think about asking a little bit more for it. However, if many farmers are selling the same thing, you may lose out if you ask for too much more.
If you sell an item that consumers don't frequently see at the market, like artichokes or ginger, the novelty may be enough to demand a little higher price than what is standard across the country. Be reasonable, but never undervalue your work or barter beyond what you are comfortable with. Most likely, the price you charge corresponds to the value of the produce, so you may stand by it with confidence. Food pricing should reflect quality, just like prices do in other consumable commodities.
Related; 30 Profitable Vegetable to Grow in Kenya
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