Pricing is one of the most important decisions that you have to make as a product business owner - but why is pricing is so important?
Firstly, your prices are important because they're related to your profit. You make money in one place of your business - and that's the difference between what you buy something for and what you sell it for.
Your selling price has a huge impact on the amount of money or profit that you're making every time you make a sale. It's impossible to build a long lasting product business if you're not making enough money every time you make a sale.
Pricing is absolutely key and you don't want to get it wrong.
I know it can be difficult to set your prices. I find it fascinating because pricing rolls into so many different elements for small business owners - and reflects your beliefs about yourself and your business.
Pricing challenges your thoughts about money and what you think you can charge for different products. You've got to try and set a price that makes you feel comfortable.
A lot of people get the fear of rejection - one of the key things that want to talk about is that because of this it's very easy for you to under price your products.
Underpricing - which is charging less for products than the market value - is something that is very, very common, especially when people are starting out.
You need to ask yourself, am I absolutely sure that I'm charging enough for my products? You'll consider how much can your audience afford, you'll think about rejection if you set your price 'too high'.
If you are not sure how to price your products the best thing to do is to be as objective as possible. I have many stages I go through when I'm pricing products - in The Resilient Retail Club I go through a seven step process for setting your prices - if you're a member take a look at that but it's basically all about how can you be strategic. How can you be objective when looking at your competitors, looking at what your customers want to pay and using that information to help you set your prices so that you're not relying on a what you believe you should charge, which could often lead to under charging.
Your pricing is absolutely critical. Make sure you get it right. Don't assume as well that you'll only make a sale if you charge less for your products.
If you under price your products significantly, you can actually affect how your customers think about your products - especially in terms of quality as that leads to customers making assumptions.
If you've got any questions about prices get in touch!
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