It can be tricky to price your services or products, especially if you have only recently started your business. You may worry that you are overcharging or undercharging your customers, which can cause significant problems further down the line.
If you’re not sure how to price your services, we are here to help. Here are five tips to help you accurate price your services.
1. How To Price Your Services: Research The Market
The first thing that you should do is research the market to get a better idea of reasonable prices. Check out both local competition and global giants, and make a note of the prices you see. It can also be useful to make a note of discounts, deals and shipping costs.
2. Calculate Costs
Next calculate the specific costs for your business. Work out how much you spend on supplies, shipping and warehouse space, and then factor in the time it takes to make the product. You may find that you are spending more buying from an international supplier, and you could save more by buying local. If so, you may want to consider switching suppliers to reduce costs.
3. Decide On A Price
Once you have done market research and calculated costs, you can decide on a reasonable price. You may be tempted to make your products cheaper than your competitors, but make sure you are still making an acceptable profit from each sale. Ultimately cost isn’t the only factor; in fact, most consumers value quality over cost.
4. Get Feedback
Once you have settled on a price, we suggest asking customers for feedback. You could do this by sending out a newsletter with a survey, or you could do a simple social media post asking for feedback. This is a great way to work out if people will actually pay the prices you set.
It can also be useful to ask more general questions. For instance, you could ask; who provides the best service in this area? What do you like about our products? Would you be interested in discounts and deals? This will teach you more about your target customer’s needs and wants.
5. Check Your Prices Every Six Months
Establishing reasonable prices is an essential part of any successful business – but don’t fall behind. We suggest reviewing your rates every six months or so, as this means you will stay up to date with any market changes. If you notice prices rising or dropping, alter your rates accordingly. This will ensure that both you and your customers are getting a fair deal.