Steps to Giving Your Products and Services the Best Price

One of the most common difficulties many business owners encounter is setting the right price for their products or services. Whether you’re just starting out or you’ve been running your business for a while, pricing can make or break your business.
If your price is too high, customers might not buy. If it’s too low, you may not make enough profit to cover your costs or grow your business. So, how do you find the perfect price? Don’t worry, this article will guide you through simple and practical ways to price your products or services effectively.

1. Understand Your Costs First
Before anything else, you need to know how much it costs to offer what you’re selling. This is the most important step. For instance, if you are into pastries business, take inventory on:

• How much do you spend on the ingredients? For example, your flour, butter, sugar, e.t.c.
• How much do you spend on gas, transportation, fuel, and delivery fees?
• If you rent a shop, how much does that cost per day or month?
• And the value of your own service(workmanship).

When all these have been calculated, you’ll have a clearer picture of expenses and revenue. That’s your cost price. You must never sell below this.

2. Include a Reasonable Profit
After calculating your cost, the next step is to add your profit. This is where your gain comes from. Profit is what helps your business grow, and also what you use to enjoy the fruit of your work.

What is Profit?
Profit, in business terms, is the financial gain a company makes after deducting all its expenses from its total revenue. Ultimately, it’s the money left over after covering all costs associated with operating the business. Profit is calculated by subtracting total expenses from total revenue.
Your revenue is the total income a company generates from sales. While expenses include all costs of production, operating expenses, and any other costs incurred by the business.

There’s no fixed rule on how much profit to add. Some people add 20%, others go for 50%, depending on the business. Just make sure you’re not undercharging or overcharging without reason.

3. Understand your Competitors’ Pricing.
Having an idea of what others in your industry sell will go a long way to help you come up with your price list. This will give you an idea of the general price range in the market. If most people are charging up to 20% for a service, and you’re charging 10%, some customers might feel yours is not as good. On the other hand, if you charge 25%, people will want to know what makes your own different.

So, look at your competitors, both online and around you. Use that as a guide to your pricing, but not necessary that you must use the exact price list they use. You can charge more if you’re offering better value.

4. Understand Your Target Audience
Your price list should match up with your target customers’ budget. If you’re selling to students, your price needs to be student-friendly. If your customers are working-class professionals or people who love luxury, then your price can be higher. Be sensible enough to give a price to your products and service that will be pocket friendly to your die-hard customers.

5. Make Your Product or Service Valuable
Sometimes, people will happily pay more if they feel like they’re getting premium value from you. So instead of trying to bring your price down, think about how to add more value. Add value by:

• Better packaging
• Faster delivery
• Bonus items
• Excellent customer service
• Beautiful branding

So yes, you may charge more than others, but if your product or service are top-notch, many customers won’t mind paying.

6. Experiment with Different Price Points
You don’t have to guess your perfect price from the beginning. You can try different price points and observe how people respond.
Let’s say you start selling your smoothie for 1,500. If the demand is high, you can decide to sell it for 2,000 the following week or month, and see if the demand is still the same. If it’s still sold out, great, you’ve found a better price. If sales drop, you may adjust your prices again.
This process is called price testing. Don’t be afraid to experiment a bit. Just be honest with your customers when you make changes, and let your value still be the same or even better.

7. Adjust your Price when Necessary
Inflation has beaten up the economy so badly globally. Prices of commodities fluctuate every day, manufacturers increase their prices because of the high cost of production, and suppliers skyrocket their prices because they find it expensive to buy from the manufacturers. Don’t feel guilty for adjusting your price when needed. Just make sure you have good communication with your customers.

8. Don’t Focus on Being the Cheapest
Many small business owners believe that the only way to get customers is to have the lowest price. But this isn’t always true. If your price is too cheap, some people may even avoid you because they think your product isn’t good. And if you’re not making a profit, how will your business survive?
It’s better to offer great value at a fair price than to try and be the cheapest person in the market.

9. Be Honest and Clear
Always be upfront about your prices. Avoid hiding charges or surprising people later with extra costs. If the delivery fee for goods is separate, make it clear to the customer from the outset. If you charge for consultations, let them know ahead of time. There should be no hidden fees at all.
People respect transparency. It builds trust, and trust is what keeps customers coming back.

10. Believe in What You’re Offering
Finally, believe in your product or service. Confidence in your work helps you stand firm on your price. Don’t let people pressure you to drop your price just because “others are cheaper.”
If you’ve done your calculations, added fair profit, and you’re offering real value, then stand by your price. People who understand quality will pay. And those who don’t? They may not be your target customers, and that’s okay.

In Conclusion
Pricing doesn’t have to be complicated. It just takes a little planning, patience, and confidence. Start by knowing your cost, then add a reasonable profit. Look at what others are doing, know your audience, and always offer good value.
Don’t forget you can always adjust and grow as your business improves. There’s no “perfect price” forever, so stay flexible and keep learning.
Whether you’re selling clothes, baking cakes, offering hair services, or doing photography, the same rules apply. Price wisely, deliver well, and your business will thank you for it.

Did you know?
That in today’s business globally, you can’t get the visibility for your business without taking it online? You can’t also rub shoulders with your competitors because you have no clue what is the in-thing in your specific industry.

At Geeksvillage, we help businesses like yours grow and stand out. Whether you’re just starting or already established, we’ve got you covered with professional responsive website designs, hosting with 100% uptime, affordable domain name and registration, targeted digital marketing and SEO, effective social media management, CAC registration, branding and eye-catching printing services of all kinds.

Connect with us. We can help you build a strong online presence and attract the right customers who will pay you your worth.
Contact us at help@geeksvillage.com. Or visit our website @www.geeksvillage.com