United Kingdom - Pricing United Kingdom - Pricing
How to build a UK pricing strategy
When working out a UK pricing strategy, you should think about:
- the effect exchange rates may have on your profits
- whether cost-based or value-based pricing is better for your goods or services
- what UK businesses charge for similar goods and services
- how UK consumers value your product or service
- whether you will charge different prices to different customers - for example, discounted rates for off-peak users, senior citizens or frequent users whether you will use a variety of pricing tactics
Finding out about your UK competitors
You can look for articles or advertisements in the trade press or newspapers to find out about your UK competitors and their prices. You should read their marketing information and check their entries in business directories. You can get a copy of the annual report for public companies. You can also check their websites and find out about them by going to exhibitions and trade fairs.
Setting prices
EC and UK competition law prohibits an agreement between a retailer and a supplier under which the retailer agrees to resell goods or services either at a price fixed by the supplier or above a minimum price level set by the supplier.
Suppliers can issue non-binding recommended retail prices for their products or impose maximum prices above which their retailers or distributors may not resell the products.
Import pricing
Import prices for products entering the UK from non-EU states generally consist of product cost plus insurance plus freight plus duty, with VAT of 20% levied on the aggregate value. End-user pricing should include local storage, delivery, sales and support costs, as well as the margin for distributors, wholesalers and retailers. Traditional pricing methods have led to the acceptance of higher prices and profit margins than is customary in the U.S., as the UK market for any product is generally.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.