by Dream Guider
There’s a principle called supply and demand that says in a competitive market, the price for goods and services will settle at a point where the demand for that item meets the supply. For example, a drug store could probably never sell it’s brand quality lotion for $20 in 2014 because the demand for lotion will never be that great, and lotion is not a scarce item to come by, so people won’t shell out a lot of money just to have it. But when it comes to your product sometimes it’s a little harder to determine what the price should be, particularly when you have a unique product. When you see just how much work it takes to do something— it’s harder to determine a selling point. Do you allow the consumers to set the price? Or, do you set the bar and only sell to customers willing to reach it?
Your price point affects your brand.
Most people think differently about a $5 coffee than they do a $2 coffee. They believe that the $5 is better quality than the $2 coffee. And sometimes that’s not the case….but the price says it is. Therefore it attracts a certain clientele. With that also comes the demand of that clientele for you to offer a particular experience that exemplifies the quality and prestige of a $5 coffee. Therefore if you aim your prices high, you have to be willing to meet a certain level of expectation.
Don’t sell yourself short.
You want to be sure that you don’t sell yourself short. You work really hard and should be rewarded for your efforts. You can’t give your product away. If you price your product too low, people won’t respect it as much. You could also end up doing twice as much work to reach the same amount of profit as you would if you increased your prices.
Where should you price your product?
Take an inventory of the price point of similar products. What are your competitor’s prices? In terms of your brand positioning, where should your prices be in relation to your competitors? If you don’t feel you have any competitors, you have to be sure to listen to your customer’s feedback regarding the price.