PRINCING AND SALES

PRINCING AND SALES

Before a company can quote a price (or give a quotation ) for goods, they must take into consideration all their costs : the production costs, shipping, insurance, etc. the total of all these costs is called the overall cost. The costing is usually done before a model is produced or exported, so the company must calculate (or work out) their overall costs in advance. From these figures they can work out the cost of each model (the unit cost). All the calculations are written on the costing sheet. The company also takes into consideration their profit. They will usually allow a profit margin of at least 10 %. So when a company give a quotation for a model, they have built into the price their overall costs and profit margin.
There are other factors, which affect the price of goods, for example the law of supply and demand. If a product is in demand (many people want to buy it) and not many firms can supply the product, then the company can charge a higher unit price. On the other hand, making goods in large quantities is comparatively cheaper than producing goods in small quantities. If there is a big demand for a model, a company can produce it in large quantities and they should be able to quote a lower unit price.
Two of the departments in a company which deal with pricing and selling goods are the sales department and the accounts department. The sales staff handle the basic forms involved in selling goods ( the invoice and the statement). The form sent by the buyer requesting goods is the order. The form which accompanies the goods or which is sent to the buyer signs the delivery note which is then a receipt for the seller to prove the buyer received the goods. The sales department then gives the signed delivery note to the accounts department will send the buyer an account each month Which shows details of all the transactions that mouth. The account is called a statement. The transactions are all the invoices the seller has sent and the money received.