From ‘The Mast’
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Finding the ‘right’ price for your product is always hard. Spoiler: there’s no right price. But there, are many wrong prices.
When I released my Bare Bones wallets online, I started advertising them on facebook. I got a lot of varied comments – people were very generous and took the time to comment.
“Why would I ever pay this much for a wallet?! I could get one down at the markets for a tenth of this price!”
“Rip off! Sharpen you pencil!”
“This wallet is so small! It needs to be at least 5 times the size!”
Those are all actual word-for-word quotes. Just for the record, I have subsequently sharpened all my pencils in the office and have replied to this customer, but he was still unwilling to purchase a wallet even post all my art accessories being appropriately pointy. Shame.
Very rarely will people tell you “This is a good price. This price is appropriately chosen for this item.” Why? Because even though our decision making starts with considering the price, we’re actually weighing up whether that listed price will deliver the quality and intangible benefits attached to it that it promises. ie, if these sunglasses actually make me look like Ryan Gosling, then I will happy pay $500 cause I am that desperate for attention (this example is not autobiographical …)
A few things to consider when pricing your product will be:
- Am I covering costs and making a profit? Is that profit enough to keep me running my business?
- Can I put a dollar value on the intangible benefits to the customer? Or, do I need to price this product a certain way to imply credibility?
With all that in mind, is that price going to be accessible to my desired customer?
- If you can find the sweet spot here, customers feedback might be along the lines of “[This product is] Well worth it!” or “Really happy!” These are all a result of them being happy with the return they’ve got on the investment.
With my wallets, I’ve been given such varied feedback. I’ve been told (by happy customers) that I could charge double what I currently do. I’ve had people wait till I’ve discounted them by 15% before they’ve committed to buying. I’ve also been abused for pricing so high.
It’s told me that there’s no right price for everyone.
There’s always something cheaper out there but if you can provide value and stand by your price, it will show that you believe in your product and what it offers. That will go along way with potential customers.
A great article I found about pricing was simply titled:
Definitely worth a read.
Psychological Pricing Is Your Golden Ticket to Selling More – Read ›
10 Questions to Ask When Pricing Your Product – Read ›
Are you running an online store? What’s your biggest challenge – I’d love to hear about it. Email them through!
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