Finding the right price for the value of your product
Finding the right price for the value of your product is one of the most difficult things you'll do as a businessperson. It's a fine line, it's a rickety bridge, a narrow way. The first rule of business is to build low and sell high, right? Well, that is right-to a certain extent. After all, the customer isn't paying only for the watch, clock, radio, game, garment, picture, book, movie, toy, etc., when they make their purchase at the local store. The customer is paying for what you pay your employees, what you pay the government, you time and thought and labor, and so forth. These things do come into consideration; if a person sacrifices a great deal to produce a product that helps, comforts, delights, etc., the world, they deserve to be paid well for it-to have sacrifice meet sacrifice, as it were. But how does one go about finding the right price for the value of one's product?
Research helps, for one thing. And running an organized business with good accountants and careful monitoring of expenditures and so forth helps too. You'll need to know, right down to the penny, exactly what it costs you to create your product, keeping in mind all the considerations listed above. But that's the easy part. Let's say that it costs you exactly fifteen dollars and twenty-five cents to create your product. What should yousell it to the public for? How do you find the right price for the value of your product? Should you raise it by one dollar, two dollars, three dollars, ten?
Your instinct, of course, it to want to raise it as high as you can, and make as much money as you can, and continue running your business effectively and inventing great new products. But two considerations come to mind: (1) you want to be ethical, that is, you don't want to rob people necessarily; and (2) most people are pretty sensitive about being robbed, and know a bad deal when they see one, and embrace a good deal when they see one.
A step in the right direction, then, is to take a close, keen, glittering look at your competitors. How are they finding the right price for the value of their product? Their product is similar to yours. Let's say you're both selling dinnerware. You sell dinnerware of all kinds, plates, bowls, knives, spoons, forks, napkins, napkin holders, salt and pepper shakers, salad bowls, salad tongs, silver platters, goblets, and so forth. Finding the right price for the value of your product suddenly seems an even more strenuous chore than when you started out. But organization is the name of the game here. By classifyingitems, by putting them in basic categories, and hitting the streets to find out what other companies are charging for those same things, you've just got off to a great start.
Now you know what other companies are charging for the items that you want to find the right price for. The next step is marketing. If you sell a plate, and they sell a plate, and the plates are of similar sturdiness, beauty, and practicality, what do you do? Do you charge exactly the same as your competitors? Maybe. Lots of these questions can be answered by marketing. Finding the right price for the value of your product will be aided and assisted by finding the right way to market your product. If your marketing technique is superior to your competitor's, your plate will get chosen first, and of course that's the first thing that matters. If your marketing technique is supremely superior to your competitor's, you can start thinking about raising the price of your product a little. Again, it may be completely unnecessary to ever raise the price.
The businesses that are really booming today offer lots of different items for low prices. But they sell so many items, so many, many items, that the low price doesn't matter in the end. These are just a few things to consider when trying to find the right price for the value of your product.