This is part 1 of a series on selling your products or services.
When it comes to pricing your product or service for your home base business many of us don’t have the time, money or patience to do extensive market research. So what do we do? We just figure that we’ll charge less than or the same as competitor’s. The problem with that is customers often equate quality with price and you could be doing yourself a dis-service.
Many people understand the psychological affect that price has on buyers, so they will over price their crap, sorry…low-quality and inferior services to get people to buy.
Even though I understand price perception I’m still willing to offer my coaching fees for a very low investment. The market that I serve, new home base businesses, appreciates it. The work at home, new start-up, small business moms who follow me know that I’m qualified, competent and consistent in the results of the clients that I coach. No hype, just results. So I’m willing to deal with the mis-perceptions some may have. I’m trusting that others are like me; we can differentiate between quality and hype. So far so good.
Three things to consider when pricing your product or service.
- You must consider marketing expenses, operating expenses, the amount of profit you want to make, self-employment and income tax along with the cost to make or buy what you sell.
- You must consider the amount that customers are expecting to pay-example: customers expect to $xx for a virtual assistant. Because there is so much competition from craigslist, odesk, elance, overseas and others many are not willing to pay more than that.
- You must consider your non-billable time- For example: you charge a client $50 an hour but spend 1-2 hours working on his stuff before you’re ever face to face with him.
What did you use to determine the right price for your service or product?
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