Price setting is a common task for any retail buyer; it is a really massive topic to cover. I just want to point out some key elements to take into consideration when deciding the retail price for your articles.
Every category of products has its specifics. There are many significant factors to take into account, starting with manufacturing cost or buying price, demographics of the consumer-target, promotion or campaign for the product, brand awareness, merchandising, packaging, strategy involved (profit oriented or volume oriented), competition, etc, etc.
There are some situations when, after considering all the objective parameters, you have no choice but just go with your gut for the final price.
Branded products prices are usually suggested or imposed by the vendor. MSRP* (or Manufacturer suggested retail price) or RRP* (Recommended retail price) is the way the vendor is setting (or at least trying to set) the price on the market. Easier said than done.
When it comes to price setting the golden rule is: The perceived value of the product should be higher or at least the same as the money value indicated on the price tag.
Second rule, which is originating from the first: the market is deciding the right price and not the retailer.
So, the key point in any price setting is to study well your target market. With experience price setting comes naturally for the buyer/ purchasing manager and this is not typically an issue. OEM** products are one notable exception, here the retailer decides how and where to position his own brands.
The extremes in price setting are obviously positioning to low your price or to high. In both situations there is a lost opportunity: