This blog post is about pricing your product or service. Pricing can be a tricky thing, and it’s important to get the price right. If you’re not sure what to charge for your product or service, then this article will offer you some tips that will help you figure out the perfect price!
Compare yourself to your competitors
If you don’t know what the market price is, then it’s time to do some research! If you’re selling something that already exists in the marketplace, then look at how other people are pricing their product or service. You don’t want to price yourself too high, but you also don’t want to be cheap and undervalue your work! Keep in mind that your competitors may be able to charge more than you because they have slowly earned a reputation.
Consider cost-plus pricing
The cost-plus method takes into account all costs involved when producing your product or providing your service. To use this method, you add a percentage to the total costs to determine what your product or service should be priced at. Experiment with the percentage you add to your product or service, but make sure not to price it so low that it does not cover your costs.
Be transparent about pricing
It’s important for people to know how much they’re going to pay upfront. If someone is interested in using your service or buying a product from you, then give them an idea of what the cost will be right away. Adding hidden fees, later on, is one of the fastest ways to lose trust from your customer.
Don’t use round numbers as prices
Using whole dollars makes things look more expensive than they really are. For example, instead of saying that something costs $10 say that it costs $9.99. It may seem silly, but this one-cent difference can drastically improve your conversions.
Lower your prices for bulk orders
If you sell a product that’s $50 and someone wants to order 100 of them, then offer an incentive if they purchase all 100 at once. Maybe lower the price by 20 percent or throw in free shipping for those extra items.
Consider the long term effects
Before making a choice regarding your pricing, consider the long-term effects! For example, you think it might be better to lower your prices because one-time sales will help boost revenue, consider what this means for the future. If you lower your prices too much during a sale, customers might wait around in the future for a similar sale, and it will become extremely hard to sell your product at its regular price.
Don’t run sales to frequently
Do not give away your lowest discount at all times! Instead, only offer discounts when necessary (perhaps for holidays such as Black Friday) and keep up with regularly priced goods to maintain customer loyalty and respect. Otherwise, companies risk becoming known as “discount” stores which no one wants to shop at because they feel like products aren’t worth anything!
Don’t underprice your product or service
Many small businesses are tempted to lower their prices as a way to gain more business. While this might be effective in the short term, it can cost you money and damage your brand. Firstly, people will associate your brand with lower quality because you are underselling yourself. Additionally, people might wonder if they can trust a business that is constantly giving away their product or service at such low rates. You want to be known for having high-quality products and services—not being the cheapest in town. Changing this perception once it has been created can also be extremely difficult, so make sure to start off right early on.
Don’t forget about taxes (if applicable)
Taxes vary from state to state and country to country so do some research on how much sales tax you should charge your customers depending on where they live. If you are selling a product online, you are responsible for charging your customer’s sales tax and tracking that income. Many sellers forget about sales tax and end up having to pay out of their own pocket during tax season.
Don’t forget about shipping fees
One of the most common mistakes sellers make is forgetting to add shipping fees into their pricing. Depending on how much you charge for your product or service, it may be beneficial to offer free shipping in order to get more people buying from you. People are generally more likely to purchase a 20 dollar item with free shipping than a 14 dollar item with 6 dollar shipping.
Pricing your product or service correctly is a difficult task. It requires careful research and consideration of what you are selling, who will be buying it, how much competition there is in the industry, etc. There is nothing wrong with experimenting with price, but make sure not to price yourself out of the market or underprice yourself either.