Forums: Discussions for entrepreneurs and small business.

Hi all,

There are a number of different approaches to pricing.  What you described as cost + profit margin is often called bottoms-up pricing.

Other methods include interviewing customers to determine how much value they derive from your product, then assigning a hard price to that value.  Another popular approach is to benchmark product against those of your competitors, and base your price on theirs while adjusting for any additional value your product offers.

My ebook describes pricing strategies for small businesses in greater detail if you`re interested in specific tactics you could employ.



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Fundamentals for Founders:
The Practical Guide to Kick-Starting Your Business

Thanks for your inputs. Till now each product we have sold has added a lot of value to the customers. Many customers have written wonderful letters of appreciation to us. Since we are into the business of creating personal & unique gifts, people have also come back saying the recipient almost had a tear in the eye when they saw the gift.

We have few competitors in this area & we are priced quite low compared to them. But in terms of value I am sure we are providing equal or sometimes more value to the customers. Thats why I felt we have to really evaluate & see if we are doing the right pricing.

Digging through some old posts, I saw reference to the book "Strategies & Tacktics of Pricing" by Thomas Nagle. I am thinking of reading through that book too.

4Founders, I`ll go through your E-book too.

Will post my learnings here.

- Jyoti
Founder, CEO
www.CraftMyGift.com
India