The market is a common place for trade, where buying and selling of goods and/or services take place. In doing trade, you need to meet certain market price requirements or specific amount of money you need to complete a transaction. Though some may freely haggle over market prices, in some trading places, market prices are fixed.
Market prices determine the financial worth of an item or service. The rise and fall of market prices may be determined by some economic factors such as fluctuating interest rates, market conditions, supply and demand, as well as market prices of other commodities. The best example for this is rising oil prices. An oil price hike may result in rising market prices for other commodities. This is because oil is used as an energy source for machineries and equipment needed for production. Delivery of goods and services through transportation may also affect movement in market prices.
Natural disasters and other calamities may influence changes in stock market prices. These unforeseen events may cause delay in production, which limits the supply available to the buying public. With higher demand but lower supply, market prices may go up. However, this is not always the case for other commodities.
Determining Market Prices
Traders come up with market prices based on the following:
- Analysing the worth or value of the item based on production budget and other operational cost such as the use of electricity, manpower, or transportation.
- Comparing past market prices and the total estimated value of the item based on appraisal.
- Considering the law of supply and demand along with other economic factors.
- Determining movement in market prices based on competition.
Market Prices Tips
If you want to get better market prices, here are few smart tips to keep in mind:
- Know where to go. The key to getting the best deals out of market prices is knowing where to look for a good buy. Learn more about your options. Various sources may help you either as a trader, a retailer, or a stockbroker. Go online and explore your options.
- Shop and compare. In order to get a better deal, it's always best to shop around. Search for better features, quality of services or goods, and discount packages.
- Deal with reputable traders. Do business with companies, retailers, or traders that guarantee safe transactions. Pay for high quality goods or services. Market prices should be worth what you're getting in a transaction.
- Know when is the best time to buy or sell. This will help you secure better trading opportunities out of market prices.