Coming up with a price that is both profitable yet competitive is an art. Most pricing centres around three methods:
+ Cost Plus Pricing: Cost plus pricing is just that. You figure your cost and then add some
percent margin on top. This type of pricing is usually done with well established, commodity
products. Industry norms usually dictate the margin.
+ Value Pricing: Value pricing looks at the value to the customer. This value could be the
worth of each feature or how much the customer saves by using your product. The trick
here is to figure out what the customer values and how much it's worth to them.
+ Restraint Pricing: Restraint pricing is determined by how much the market can afford to pay
and this is not a market that you want to be operating in.
Entrepreneur Prodigy - Definitive Reference Guide
Written by an experienced and successful technology entrepreneur, this is exactly the type of book that the author wished that he had access to when he started out.