How much is the price of your product or service?

If you have a product or a service which you are trying to sell, how do you set the price? This is a common question which every entrepreneur thinks of when they are trying to make money online. A new entrepreneur who just started his or her own business with the first newly launch product or service usually set the price reasonably. So how do we set a reasonable fair price? Well, we start out by determine the cost of the product or service. It usually defines as the money use to create the product or service in terms of material, time, design, skill and manpower. Add those up and give it a 20%~50% markup price becomes the price sold. And if customers question about the price or asking how do you define the value of your product or service, you can at least justified it.

If you are seriously into money making opportunities or trying to maximize profits, that’s not the way to set your price. Regardless of the cost of your product or service, the price is set according to the demand of the market and the buying power of customers. Customers will pay for it if they need the product or service and having the ability to pay for it. So the real homework that you need to do before setting the price of your product or service is to research the market and study your potential customers.

Did you ever wonder why certain products or services are so expensive? Particularly if the products or services are related to industrial or enterprise software, the price usually goes sky high. The reasons or excuses sellers provide for being expensive are just a way to make you feel comfortable when paying for it. The price can be set as high as we can imagine as long as customers are able and willing to pay for it. So next time when you are trying to set the price of your product and service, think big by finding out how much money you can squeeze from customers. Don’t think small by trying to cover the cost of your product or service.

P/S: Think like an engineer when you are trying to solve problems. Think like a salesman when you are trying to set the price of your product or service.

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