From the course: Revenue, Staffing, and Expense Models Explained
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The four pricing models
From the course: Revenue, Staffing, and Expense Models Explained
The four pricing models
- So as I mentioned earlier, you've got four different pricing models that you can use in our worksheets here. So let's say that you have a business that has many different products and many different price points and a lot of businesses are like that, a lot of retail businesses, where they carry literally tens of thousands of skus and you're like, "How do I forecast revenue on every sku?" Well you don't. In fact, there are techniques, I'm going to give you two techniques, in which to potentially use for your business. One is called grouping and tiering. Essentially what we're going to do is we're going to group things by individual pricing tiers and then we're going to estimate revenue based on those pricing tiers. Let me give you an example. Let's say that I have, I'm going to sell a hundred units and they could be a hundred units of anything, and the average price is between $4 and $6 so I might actually put $5 as…
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