For a company to remain competitive and stand out in the market, one of the differentiators is an appropriate pricing formation for its products. According to the Federation of Commerce of Goods, Services, and Tourism of the State of São Paulo (FecomercioSP), the merchant must have complete knowledge of costs and operational expenses to manage them coherently, positioning themselves better than the competitor.
According to the Entity, it is necessary to pay attention to direct costs, such as labor and suppliers; and fixed costs, such as salaries, taxes, internet, and banking fees. The list is completed by indirect costs, depreciation and maintenance of equipment, service providers, variable costs, sales freight, commissions, overtime, among others. The revenue generated must be subtracted from the sum of these cost numbers, which needs to be satisfactory to cover fixed expenses and obtain profit; thus, the contribution margin will be constituted, that is, what each product contributed individually to the formation of net revenue.
It is also necessary to find the specific price of each item. For this, 
markup is used, the calculation is made through the percentages of variable and fixed expenses and the desired profit. The formula used is markup = 100 / [100 – (DV + DF + LP)].
In small establishments, usually the entrepreneur themselves is responsible for pricing formation. In this reality, FecomercioSP suggests seeking data from the accountant to use financial reports in this task. One can also opt for specialized consulting, junior economic advisory services within universities, or investments in courses for self-training would be accessible options.
However, when the business expands, the Entity recommends hiring a cost analyst. Because if there is no qualified professional, there is a risk of: not accounting for fixed expenses; copying competitors’ prices; forgetting about taxes; confusing margin with profitability; or not knowing how to implement price increases.
The Federation reminds us that price adjustments do not always keep pace with inflation, as some items may not have changed. It is important to understand the entire production chain, analyze inflationary indices, and make comparisons within the sector of operation.
Source: Fecomercio Press