I count my estimated expenses for a year, salaries to give and put some +- amount on it. Chunk that down to months, fix goals to get more than that estimated expense and minimum number of users to convert to get to that amount. Once customer joins us we put our every effort to satisfy his/her needs and with that they will happily pay us a bit higher amount than the market.
Most of the time, similar product or services already exist in the market. Research their pricing and set your own pricing - either same or little lower or little higher - depending upon your own judgement.
For our Email Marketing Services, we did research and made the pricing almost half of our competitor companies in USA :)
Matrubharti ebook app has subscription model, our competition is with magazines and newspaper supplements of literature in regional language. So we wanted to be competitive against the subscription of those, so we chose to offer 1/2 of newspaper charge or 1/2 of magazine charge per month.
We outsource most of our products from different bakers and confectioners. The pricing is almost same as that of the baker. Yes, there are few products which are not in the regular menu of the bakers and we got it developed over last three years. These products are sold at our rate. However the rates are decided on the basis of baker, time required to make the cake and transportation efforts. Also we check the rates offered by other people in same segment before finalizing the final price.
When we started our business we have kept our prices lower than one established brand and promoted as quality @ affordable rates. Today after 2 years of business , Now Pricing is decided on revenue hike. Same competition is there but now you can get your price on your product quality . At least now going down in pricing is only if volume is large..
Any product that we sell B2C or B2B,we price it 4X cost. There are so many layers that get paid,for us to make a good ROI it has to be 4 times our landing cost. If you can sell a product 4X your cost, it will eventually take care of everything else. (Expenses,Marketing,Branding ETC)
Pricing of the product/services is based on the below factors
1) understanding the full range of pricing options (Highest price and lowest price)
2) What is the Market Size
3) customer’s willingness to pay
4) Check on your costings(production, marketing, development,logistic, inventory etc)
5) Competitors pricing
6) Life cycle of the Product
(If an early-adopter are willing to pay a premium for a product, then company may consider a high release price to apprehend the extra value, with planned reductions down the road to attract latecomers. this can also help companies to balance demand and supply game.)
I am a Company Secretary in Practice and partner at M/s AAS & Associates. We decides our fees on the basis of the following circumstances:
1- Consumption of Time.
2- Level of Services.
3- Number of Documentation.
4- Risk / Liability of us while rendering of services.
5- Project Potential of clientele.
6- Number of Services.
We believe in providing high level services to our client to ensure him to do hassle free business. It is therefore, we do not compromise in the service standard.