What is a flat rate?

The flat rate is a single fee paid by businesses or individuals for good or service rather than paying a variable rate. This allows the buyer to realize the price needed to purchase a product or service in advance. From an economic point of view, all transactions around the price are. The amendment of the flat rate requires greater planning and control because the income is fixed; The distribution of multiple products results in higher costs that will reduce income. The flat rate can also be a marketing tool where a variable rate company charges a flat fee. This structure can focus on the industrial standard or on the cost of the company's production and operation. This first model results in a rate that cannot change too much without moving consumers' behavior towards a competitive society. For example, the industry standard can be $ 10 USD (USD) for five widgets. The method of increasing profits should produce widgets at the lowest cost to meet this standard. VigorFour higher quality widgets for $ 10 may not persuade consumers to buy these items, even if they can get more usefulness. Consumers only see the value of the goods based on the rate charged for products.

One option for adjusting the flat rate system is to create a staircase prices structure. For example, the first five widgets cost $ 10. Another five may cost $ 9, another $ 5 and so on. This ultimately results in a mixed price structure that provides consumers with a discount on volume purchases for goods or services. According to this structure, suppliers use their savings of scope, allowing them to sell multiple units at cheaper prices. Another possibility to achieve lower prices using a flat rate is to sell larger groups of goods or services to a lower Rde. If five widgets cost $ 10, consumers who buy 25 widgets can only pay $ 45, which is 10% discount on the purchase of volume.

The problem with the flat rate prices is that consumers may not see the value if the goods are valued at a high rate. Consumers usually do not like to pay for goods or services that they will not use. Companies that seek to use a higher rate for a volume of goods may face consumer resistance if the rate is higher than the purchase of all goods as individual pieces. An alternative to a flat rate is to account for a variable rate. This means that the buyer pays only for the necessary or used goods only at a certain time, saving them additional costs for payment of one rate. As the use rises, the price also applies; When used use, it is true.