Pricing

For certain companies, pricing is very simple. For others, it can be the most difficult part of running the business. Whether it is simple or difficult for your business, it is probably the most important decision you will make for your business. Pricing too high can drive away business, while pricing too low can erode profits.

Unfortunately, this is just the beginning of trying to determine the best price for your product or service. There are a number of elements to consider, since pricing is one of the key factors in a customer's decision to purchase your product.

• The price of your product or service is often linked to the quality of your product or service
• Your prices are often compared to the prices of your competitors
• Your price should be consistent with your image...you do not want to project a high-quality image with very low prices
• In many cases, recurring prices seem cheaper than one large price...$20 per month is the same as $240 per year, but one seems much more expensive than the other
• A few dollars or a few cents can make the difference between a sale or no sale...a customer may buy for $4.75, but not for $5.00
• Your competitors' prices need to be considered to ensure that you are not too high or too low
• Location also plays a part in pricing...prices can vary based on the part of the world, part of the country, or even the street your business is located