Question

What is selling cost? Explain.

Answer 1

• Expense incurred to sell a product is called the selling cost of that product.
• Selling cost includes expense incurred on packing, making the product attractive, sales tax, transportation, showroom expenses, money spent for selling, prizes, gifts, advertisement cost, etc.
• The concept of selling cost exists in both monopolistic and oligopoly markets.
• Through selling cost, the seller tries to attract the consumers by incurring various selling expenses.
• Selling cost creates product difference in the market which then gives a particular identity to a product. For example, companies manufacturing mobile phones, television, cars, soaps, etc. try to create unique identity through selling costs.