Forums: Discussions for entrepreneurs and small business.

I am trying to establish a price point of $19.95 for my product, or idea I should say.  The product will have a plastic tube with vinyl end caps, a nylon strap, and some microfiber-like material.  

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Hi Phil,

Try this link the the Harvard Business School tool kit.  There is a down loadable set of pricing tools that might Help.

                      http://hbswk.hbs.edu/archive/1262.html


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The older we get, the more excuses we make for not chasing after our dreams. But truth is, goals are attainable at any age.

Great points made so far. A couple of things come to mind that might need to be considered when trying to establish pricing:

•  Competition – Where are they priced? Are their products of similar nature? As pointed out above, both car makers but not competitors. If your true competitors are priced around $19.95 and your customer demographics are similar, can you survive being priced at $29.95.?
• Commodity or a “fashion” product – does your product have a point of differentiation? If not, is it a commodity and therefore relegated to which product is cheaper (see above point). If not, you need to justify your higher price by communicating the benefits of your product. Depending on the type of advertising, you may need margins north of 60% in order to support an advertising campaign.

Not knowing what you have in terms of capital resources, but have you thought about focus groups? Ultimately, it comes down to the consumer and whether or not they feel they are getting value for what they are paying.

Ed Baloga, CPA / MBA
Principal CFO
Baloga Associates
ebaloga@baloga-associates.com
www.twitter.com/edbaloga

Thank you all very much for your replies.  All of you have given me some useful advice. 

Does anyone have any experience with licensing or manufacturing products?  I know that there are pros and cons associated with each course, but does anyone have any insight?

Thanks again,

Clay

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The older we get, the more excuses we make for not chasing after our dreams. But truth is, goals are attainable at any age.