Skip to main content

Pricing The Product/Service


To decide the prices for our business’s service, I looked at some of the popular nation-wide delivery services and their pricing. For example Amazon charges its members $15/month on top of a $8.25-$10.25/month Prime subscription, which eventually is a $23-$25 for their grocery delivery service. Assuming an average consumer spends 3-4 grocery trips every month, that’d be between $6.25-$8 per trip.  

Vons is also another grocery delivery service, whose parent company is Safeway, offers same-day delivery. For purchases of $150 or more, Vons charges $9.95 for their delivery service. For purchases less than $150, the price goes up to $12.95. This company’s service pricing is obviously much higher than Amazon and what our business anticipated. However, it also proves that there are business models out there that can still profit off much higher pricing in exchange for the convenience that they offer.

For being a local business with the advantage of time and place convenience (which nationwide companies cannot fully provide), I think we can match our prices to about the same as online grocery delivery services. As starter, I think we can charge between 7.5%-10% of the total shopping cost, with a minimum of $6.99 up to a maximum of $14.99 per trip. As the business expands with a larger customer base, we could charge the service by monthly subscriptions of $25 for up to 4 trips. I think the pricing is a little bit modest at the moment but matching our prices relatively to currently available similar services out there with the advantage of time and location convenience, it’d make a convincing consumer friendly appeal. On top of that, we’d like to give customers the options to choose which local stores they’d like their purchases to come from instead of the ones only available with their delivery company.






Comments

Post a Comment

Popular posts from this blog

What do I want to get from this class (T INST 475)?

Although I never had an intention to be an entrepreneur or starting my own business, I still wanted to take this class to explore this career path that many people have often found it successful enough to pursue.  Another reason why I chose this class is because it focuses on entrepreneurship opportunities through the tech industry. As a student in the field, I’d like to learn about how and when to take advantage of certain types of emerging technology, so that I can make better career path choice with better chance of success. I’d like to learn about the process of running a business: dealing with taxes, legal obligations, marketing, expanding business, etc. Although it is very unlikely that I’d need or use these skills, I’d still like to know them to better prepare my portfolio, to deal with situations in future work, and maintain professional life. Knowing the process of running a business does not only benefit the business owner, it can also benefit those who work in the busin...
Post a Comment
Read more

Protecting Business Intellectual Property

Being a service-based business, there aren’t that many things that are considered intellectual property that need to be protected. The only thing that I can come up as being closest to needing intellectual property is the copyrights to the business’s website code.   The code is used to create the business’s property and is part of the company’s property. Although not directly belonging to the intellectual property zone, securing a domain name that closely resembles the business name is also a must we are trying to run our service orders through online website. As far as the business model goes, it is a market full of similar service, hence similar business models. Getting a copyright to a business model that everyone knows about is not very beneficial. However, I think the business will have a good number of trade secrets including distribution methods, customer profiles, and advertising methods. As the business aims to gain reputation through advertising agreements with local st...
Post a Comment
Read more