I have two mobile phones from two brands; one is more expensive than the other. Why? I would say it’s because they don’t provide equal value to me!
You may argue that it’s not applicable in all cases, but there’s a strong relationship between price and value (or perceived value).
Brands that charge premium price for their product and services believe that they are worth the charges. They have established consistent and repetitive value in a specific field or area of interest.
Pricing your offer could be challenging, especially when starting your side business. You want to find the balance such that your price is low enough not to scare potential customers or to make you lose existing ones; but high enough that you would make profit.
Before deciding on what your price would be, whether you are selling a product or rendering a service, it’s important to ask yourself these value-based questions:
- What will your customers feel, receive, and talk about when they hire you or buy your product?
- What do you offer? Your specialty
- Will your product or service make the lives of your customers better?
- Is your product or service of a higher quality than those in the price range you are considering?
- Can you boast that your customer would recommend your product or services to others?
- How do you represent your product or service in your world (social media, person)?
Having assessed your value, your pricing could differ depending if you are selling a product or a providing a service. However, below rule of thumb may help for each case:
Figure out how much it will cost you to produce a product and add profit. How much to add depends on:
- What income would make each sale worth your time and effort spent in developing the product?
- What’s your projected volume? For higher volume products, you could still make profit even when you price is slightly above the cost of production. For low volume products, your price would need to be much higher.
- What are others charging for similar products as yours.
When deciding on the minimum acceptable price for your service, consider the time needed for any preparatory work and the time spent on actually providing the service.
You could choose to go with a flat rate or an hourly rate. The goal is to choose what works for you.
If you can’t find something that fits, look for services that you consider competition and see what they charge. Or, you could check freelancing websites like Fiverr, Upwork, Toptal, Simplyhired, PeoplePerHour, Aquent, The Creative Group.
Nevertheless, when you’re starting out, don’t be in a hurry to get the most out of your rate just yet. Instead, focus on finding an acceptable hourly or flat rate. You stand a better chance if your price is lower than someone with much experience and established reputation.
Whatever you are offering (product or service), you would adjust your price as you provide consistent value and establish reputation. You can’t ask for a higher rate when your value has not been justified……. your customer determine value.
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Success in your Journey ………