Discusses pricing formula and other fees, value-added tax (VAT), etc.

Prices are largely determined by supply and demand. When making pricing decisions, market entrants should consider:

  • The population’s low purchasing power;
  • The high cost of transportation;
  • Value-added tax of 20%; and
  • The lack of competition or locally-manufactured products in many categories.

The market in Armenia is considerably price sensitive. The public is likely to recognize small price differences among various brands.  High-priced items, such as automobiles, or apartments, traditionally are priced (and paid for) in dollars, though officially all prices should be indicated in, and all payments made, in local currency – the Armenian dram. There is no standard pricing formula, but normally the prices are comprised of self-cost plus taxes (VAT, excise tax) plus profit margin plus shipping.  The use of reference pricing by the Armenian Customs Service can significantly impact profit margins on imported products and those produced from imported raw materials. The State Commission for Protection of Economic Competition has on a few occasions intervened to prevent what seemed to be overpricing of certain consumer goods resulting from abuse of a dominant market position.

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