Appropriately pricing a product can be a tricky business. Especially young companies and start-ups , which are completely new products want to bring to the market often have problems finding the right middle ground – mainly because the brand behind it is not yet very well known. The fear: If the price is too high, in the worst case no one will buy the product. On the other hand, if the price is too low, the profit margin may not be sufficient. Finding the right balance is sometimes very difficult. In this post you will find valuable tips to give your product the correct long-term price tag and to identify possible problems and stumbling blocks early on.
The look inside
Orienting oneself to one’s own costs is a simple principle that is easy to follow, especially for beginners. What are the manufacturing costs of the product? What are the running costs that need to be covered? Are you talking about a one-time purchase price or are you dealing with a subscription model? Regardless of the answers here, the profit margin must of course not be forgotten – you have to somehow keep your company profitable.
After answering this With the first questions, a number was found relatively quickly that works well for the company. However, this sum is usually a bit utopian, because one thing has not yet been considered: the customers. If the price is not accepted, the best calculation is of no use.
How much would you pay?
Good entrepreneurs: people are completely convinced of their products and usually rightly so. But a critical look can also help: Take a look at the customer’s situation and take a skeptical look at your product. Would you pay that much Customers are particularly cautious about start-ups and lesser-known products because they don’t even know whether they like the product. The solution: Try to find out how much your target group would pay for the product and include their desired price in the calculation.
Here is For the constant evaluation , above all, good customer service is the be-all and end-all. Because to find out how people think about your prices, you need established and simple communication channels.
What does the competition say?
Not only when crossing streets, but also when pricing your products, it is important to look to the right and to the left. How are the competing products priced? These values can be a great guide to better classifying yourself and your own product. Now the favorite word of the start-ups comes into play: the USP (Unique Selling Point). Knowing what exactly differentiates your products from those of other suppliers can help you to better estimate the price that will ultimately be called up. In a nutshell: If your product is cheap to manufacture, you can beat the competition in terms of price. If your product has a certain advantage over the others, you can again price it more heavily.