What are the goods? Key concepts

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The ability to become a commodity that can be traded means that goods are seen as goods that energize trade and make the economy work. They include all physical goods such as raw materials (copper, oats, iron ...) or non-physical goods (patents, licenses, even shares of a company). The value of the merchandise may fluctuate over time. y como se aprecia en sus precios. Los factores que pueden influir en ellos suelen estar condicionados por la situación del mercado en ese momento. Para comprender qué factores influyen en sus precios, si pueden incidir al alza o a la baja o según la relevance de una compañía, sigue leyendo. El post de hoy tiene como target profundizar en los productos y comprenderlos en su totalidad desde los diferentes puntos de vista e intereses involucrados en ellos.

Factors influencing the price of goods

The price of goods may remain high or cheap, but in most cases their prices will fluctuate over time. All this will depend on the different factors that intervene in them. The most prominent would be the following:

1. For its abundance. Those less abundant goods tend to be more expensive, since there are fewer and they are more valuable. If at the same time it is an essential merchandise in the manufacture of some products and there are no substitutes available, it makes the price rise even more. On the contrary, less manufacturing or less interest in marketing will cause its price to fall as there is less demand. In addition, the total availability of the merchandise will count. By way of example, palladium (used by way of example in catalytic converters) is very rare and its price is high, while water is very abundant and its price is low.
2. If they have substitutes. In keeping with the above. If the goods are essential in the manufacture, elaboration or sale due to their characteristics, they usually have a higher price. Especially if other goods cannot be used due to their characteristics, that exclusivity makes them valuable. As an example gold. If at the same time a new good appeared that could be sold, that also generated a lot of demand, and that could only be made with gold, that would cause the price to rise even more.
3. For exclusivity. These exclusion rights are regularly attributed to patents or trademarks. These restrictions to sell the goods or services also cause those goods to increase or decrease in value. By way of example, a license may be valid for a few years, in the same way as a patent, and then "free rein".
4. The logistics used. El precio de las mercancías puede estar sujeto al transporte, almacenamiento, lugar de origen, etc. Toda esta infraestructura y logística para comerciar con ellas puede hacer subir el precio en función de la ubicación final del negocio. Hay un momento en el que, dependiendo de las características y valor de alguna mercancía, las compañías pueden decantarse por modificar su strategy en caso de que lo requieran mucho o poco para su actividad económica. Esto nos lleva al siguiente punto.

Assets based on business vision

Whether the products are priced higher or lower will depend on the factors mentioned above. However, the "last word" lies more in the business approach that can be given. That selling a merchandise is more profitable or not for a company, in addition it will depend on your profit margins. If the achievement of the merchandise is highly influenced by the origin, a company (and depending on its size) can move if from this dynamic its production becomes more efficient and profitable. On the contrary, the sale of your products or merchandise may be affected or rewarded, depending on the ease of its distribution. Choosing about these strategic changes will depend on the vision and objectives of each business.

This strategy and business vision can come to consider to what extent a merchandise is essential or not, to continue with the segment, or to reinvent itself, depending on the profitability it can achieve from its final billing. It also influences the price paid for it and, consequently, the search for new alternatives. In the most extreme case, with no margin to be able to do without one or more goods with high prices, the company must be very clear about its viability and economic model.

Depending on the position of the company.

In short, not all companies offer their products or market their goods at the same price. A sector can be with regulated prices (for example that of tobacco in Spain), but as a general rule a company usually sets the price itself. This will make that sometimes the achievement or distribution of the merchandise can be more or less profitable. If the turnover is high with high profit margins, for example, Apple compared to the other smartphone companies, has more room for maneuver.

Otro ejemplo podría ser el de una compañía dedicada a la extracción de oro. No todos invierten el mismo presupuesto para conseguir las onzas de oro. Aquellos mineros cuyo presupuesto para conseguir la misma cantidad be menor podrían ver caer el precio del oro y aún cuando fueran menos rentables lo seguirían siendo. Por el contrario, quienes deban invertir fuertemente en la minería de oro serían los primeros en verse perjudicados si ven que baja el precio de la materia prima que desean repartir.