Can you always choose the selling price?
You can set the prices for your product or service. The government can intervene, but this only happens when the economic situation is so bad that action is necessary. The government can then set a maximum price for specific products or services. This is set out in the Prices Act (Prijzenwet, in Dutch).
Setting fixed prices for books
The price of new books is an exception to this. Publishers and importers fix book prices. As a result, new books can be bought in any shop for the same price. This does not apply to e-books.
Read more about setting fixed book prices.
Calculating your cost price and retail price
To calculate the price, consider all of your business costs. This is the starting point for your price. On top of that, add your profit margin. This is the amount you charge per product or service to cover your time and work.
Examples of costs you should include:
Direct and indirect costs (cost price)
Direct costs is the money you spend directly on making or buying (the materials for) your product. For example, if you make shoes, you have costs for glue, leather and sewing thread.
Indirect costs are costs that are not directly related to the product, such as energy costs. To make a shoe, you need energy for the sewing machine. You also use energy to light your premises. These energy costs are indirect.
Fixed and variable costs
Fixed costs are independent of a product but apply to your entire business. You always have them, even if you make more or fewer products than usual. Examples are personnel costs for permanent employees, and depreciation costs.
Variable costs depend on the number of products you make or purchase. Think of hiring temporary extra staff or higher transport costs when you make more products.
You usually also have to charge your customer VAT. You calculate VAT as a percentage of your price. The Dutch VAT rates are 21%, 9%, 0%, or exempt. The rate you charge depends on the type of product or service. Does your business have no more than €20,000 in turnover? Consider using the small businesses scheme (KOR).
Learn more about charging VAT.
Do not make price agreements
You must not make price agreements with other businesses. Only you can determine the price you charge for a product or service. This prevents you from making a cartel agreement. The Dutch Competition Act (Mededingingswet, in Dutch) forbids this. Otherwise consumers do not pay a fair price and other businesses are disadvantaged. There are some exceptions. For example, for small businesses.
Learn more about cartels and competition.
Put the price on your products
Do you sell your product to consumers? Then there must be a price on it. Or on the shelf where the product is. This applies to both physical shops and online shops. There are exceptions: on art and antiques, for example, you do not have to state a price.
Read more about product price labelling.
Can you adjust the price at any time?
You can usually raise or lower the price of your product or service at any time. For example, if you have a shop, you can freely adjust the prices of your products.
Do you already have a price agreement with a customer? Then you can only adjust the price if it is stated in the general terms and conditions. This also applies to adjusting the price of subscriptions, such as at a gym. You must state in the terms and conditions how and when you may increase the price.
Raising the price as a service provider
Are you a service provider? For example, a painter or contractor. Then you can make various agreements about the price. Examples are: a fixed price, a guide price, or a price based on hours worked and materials. Different rules apply about raising the price.
Read more about increasing prices as a service provider on the Authority Consumer and Market (ACM) website (in Dutch).
Statutory price increase
Is your cost price going up due to a government measure? Such as excise duty or a VAT increase. You are allowed to adjust an existing price agreement because of a statutory price increase.
Why adjust your price?
There are several reasons to regularly adjust your price. You may want to raise your prices for one of the following reasons:
- Your costs have increased. For example, due to price increases of related services or products.
- The quality of your service or product has improved.
- You want to earn more from the sale of your service or product.
There may also be reasons to lower your price. For example, if your costs have decreased or if you want to attract more customers.
Adjusting prices with a price index
Are you planning to adjust your prices? Consider the price index figures from the Central Bureau of Statistics (CBS). These figures allow you to index your underlying services or products and monitor changes. In this way, the price development in the market becomes the basis for your price adjustment. This is called indexing the price.
Read more about adjusting your price with a price index.
Increase price due to higher costs
You may be facing higher costs due to rising prices, for example, for raw materials, packaging, or fuel. You may want to or even need to increase the price of your product or service. How do you deal with this?
Read more about prices and dealing with higher costs on KVK.nl (in Dutch).
Rules for discounts
There are several rules to keep in mind when discounting your products or services.
Discounts must not be misleading
Since 28 May 2022, there are new rules for giving discounts. A ’before’ price must not be misleading. You must only compare the discount to the lowest price of at least the past 30 days. Before the new rules, sellers sometimes raised the price for a short time before announcing a discount. This made the discount seem bigger.
Maximum 25% discount on alcoholic drinks
You are also not allowed to offer a discount of more than 25% on alcoholic drinks. This rule applies to both physical shops, such as supermarkets, liquor stores, and off-licences, and to online shops. The rule does not apply to places where the alcoholic drink is drunk on the premises, such as in the catering industry.
Read more about selling alcohol.
Statistics: Are prices rising or falling?
The graphic shows how consumer prices have changed over the past 10 years. The price development of 'all expenditure’, or consumer price index, has steadily increased. Not all products or services show this price increase. The prices in restaurants and hotels, for example, develop differently from the prices of clothing and shoes. This graphic uses 2015 as baseline year. The price development is relative to that year. For instance, the value 120 means a 20% rise since 2015. A product that cost €10 in 2015, now costs €12.