The Value Of Your Business: Selling Your Product For The Right Price

Posted by Penelope Herbert on April 29, 2019 · 2 Comments 

What is the right price for the goods and services you sell? This is one of the trickiest and most important elements of being in business. Is your pricing the right price?

Regardless of what you are selling, the right price will help your product or service be successful in the market place.

Getting your pricing wrong will result in a loss of sales with a negative feeling for customers. If a customer feels they have been ripped off or a price is too cheap, your business may struggle. A price that is too low can be as harmful as a price that is too high.

If you are in business, you’ll know that there are a variety of pricing strategies you can use. But what is the right approach and right price for your particular business?

Finding The ‘Right Price’ Strategy For Your Business

Pricing strategies are definitely varied. They include bundling, premium deals, penetrating the market, price skimming and tactics such as economic and psychological pricing.

Another component is cost based pricing. This is where a fixed sum or a percentage of the total product creation cost of creating is included in the selling price.

However, with each pricing strategy there are pros and cons. It can take time, research and experimentation in the market place to find the right price for your products and services.

The Essentials You Need To Know

The basic premise of being in business is to cover your costs. Included in your pricing strategy must be items such as overheads (rent, power), raw materials, accounting fees, a profit margin, etc. This is where cost based pricing is a good place to start.

However you also need a revenue target. Look at your sales cycle (perhaps it’s seasonal) and estimate how many units you need to sell over what time-frame in order to meet your revenue target. This will give you the right price for your product or service.

Of course, you’ll also need to check out the competition. Know what the market is prepared to pay and keep a good eye on what your competitors are charging.

Remember The Goal

Being in business is not ALL about the money for many business owners. Of course you must be profitable but you may also want to provide a great product and a great price. Being too cheap may make people think you don;t have the quality. Being too expensive could drive consumers in to the arms of your competitors.

The marketing mix must also include customer loyalty. Develop a great reputation for customer service excellence as well as great products and competitive pricing.

However, making the wrong pricing decision will make it much harder for your staff to sell it. Your pricing reflects the value you place on your business. So, don’t undersell but do research what consumers will be willing to pay.