Business Tip of the Week: Learn how to price your product/service

One of the most important decisions you can make as a business owner, a marketer, an accountant and a business strategist is determining a price for your product or service. The price you choose to set communicates value, market position and customer expectations. From a back end perspective, it also determines the ever-important potential of profit.

Choosing a pricing strategy for your product can be intimidating because there’s a lot riding on it. You can tackle this task by breaking it down using these five considerations:

• Costs: You want to ensure that the price of your product generates enough revenue to cover your costs.
• Customers: Learning a much as you can about your customers will help you accurately price your products.
• Competition: How is your competition pricing their products? This number is great jumping off point. You want your price to be competitive, but also reflect your product’s value.
• Tiered pricing: If your product(s) can be differentiated through additional features, price them at points that reflect their individual values.
• Odd number pricing: Why does iTunes sell songs at 99 cents instead of $1? In the eyes of a consumer, a few cents can mean the difference between purchasing and passing.

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