The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

Any tips on how I can select correct prices?

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

Kokaka

Contributor
Aug 9, 2019
78
51
45
Hi all.
So I have recently started another company who deals in selling machines to clinics. So far things are going great.

This got me thinking in starting my own brand and import and create new machines for the clinic industry, because the profit would be about 4-600% greater than the one I have now and I can offer way, way more machines.
Funny thing is, I have 2 really big competitors and they both mix up high quality machines with "Their own brands" who is cheaper to aquire than the premium machines they offer.

I have found the companies who supply them and I can just sell the same machines as they do or change chassi and name and make it my own.
Sure, I cant offer the same quality of service as they do, atleast initially because they both have 15+ employees, but I can counter it by always having machines in stock to trade, change parts etc, untill I have more capital and start hire people who do it for me. I have a place to do so and I have my own clinic who will function as showroom and storage untill I need a bigger place. Hopefully in February if things continue as they do.

Anyway, back to my question. If I where to get the same machines as my competitors have, what should I charge?
I can charge 30k for a 80k machine and still make a profit but that would lower the market value over all. I could sell more initially and build up a fast capital to reinvest in the business but later on it could lower the price for all of us.
Or I could charge a price very similar to theirs, sell less but make a greater profit per machine over all and it would take longer time for me initially to reinvest.
The more money I make, the more machines I can import and I can get a stockroom/showroom that is just perfect for me before anyone else that is up for grabs.

Lastly, I have no expenses, except ads rent and food so I can charge way lower but I dont want to pollute the market.

So yeah. Any ideas?
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Last edited:

Kokaka

Contributor
Aug 9, 2019
78
51
45
Hi all.
So I have recently started another company who deals in selling machines to clinics. So far things are going great.

This got me thinking in starting a new brand and import and create new machines for the clinic industry, because the profitwould be about 4-600% greater than the one I have now and I can offer way, way more machines.
Funny thing is, I have 2 really big competitors and they both mix up high quality machines with "Their own brands" who is cheaper to aquire than the premium machines they offer.

I have found the companies who supply them and I can just sell the same machines as they do or change chassi and name and make it my own.
Sure, I cant offer the same quality of service as they do, atleast initially because they both have 15+ employees, but I can counter it by always having machines in stock to trade, change parts etc, untill I have more capital and start hire people who do it for me. I have a place to do so and I have my own clinic who will function as showroom and storage untill I need a bigger place. Hopefully in February if things continue as they do.

Anyway, back to my question. If I where to get the same machines as my competitors have, what should I charge?
I can charge 30k for a 80k machine and still make a profit but that would lower the market value over all. I could sell more initially and build up a fast capital to reinvest in the business but later on it could lower the price for all of us.
Or I could charge a price very similar to theirs, sell less but make a greater profit per machine over all and it would take longer time for me initially to reinvest.
The more money I make, the more machines I can import and I can get a stockroom/showroom that is just perfect for me before anyone else that is up for grabs.

Lastly, I have no expenses, except ads rent and food so I can charge way lower but I dont want to pollute the market.

So yeah. Any ideas?
Got one Idea. Sell the competitors machines with their prices but offer it with a Sale discount of 10-20%.
Then I will have my own brand with the same tech but different chassis for 30-40% lower.
That should cater to everyone.
 
Last edited:

MJ DeMarco

Administrator
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 23, 2007
30,929
114,437
3,751
Fountain Hills, AZ
Sounds like your value skew is "cheaper." Therefore, you should charge less since there is no other reason to buy from you other than the best price.

Are these machines commodities? Or do they require extensive service agreements, training?
 

Kokaka

Contributor
Aug 9, 2019
78
51
45
Sounds like your value skew is "cheaper." Therefore, you should charge less since there is no other reason to buy from you other than the best price.

Are these machines commodities? Or do they require extensive service agreements, training?
Thanks. Theese are fully professional machines used in advanced beauty treatment.
The standard in this business is that the machines come with a 2 year warranty and training.

The training I will offer will be the best in the business since I will have the machines in my clinic and will use my beuticians to do the training and they work with the machines every day.

The problem is the service since I dont have a mechanic here.
My supplier offer me 2 years on every machine, so my Idea is to use his warranty initially. When I sell one machine, I will buy one and have in stock for a part of my profit. When I sell 5 of the same machine, I will have 2 in stock etc.
That way I can trade the customer a new machine and send the old machine for service.
Later on I will hire a mechanic, sales person, secretary etc.

Now for the good part. The upsale is about 1000% or above on my competitors, so the profit per machine is insane and will allow me to do the above mentioned strategy.

So when it comes to new machines, I will have 2 categories.
"My Brand" and "My Competitors Brand"

The purchising price per unit is the same. The tech is the same. The chassis and design differ.

I am thinking of having my brand as a "budget brand", just to get liquidity fast so I can expand fast.

Then I will have my competitors "premium" brands. They are sortof established on the market (New market here, only about 5 years old) and I will charge them with a discount.
Then people are free to choose Budget or Premium.
My profit will be high either way.
 

Speed112

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Dec 5, 2013
30
38
109
26
Bucharest, Romania
Charge what the market will bear!

bear.jpg

Or, well... Finding the right spot for that is pretty hard.

Ideally you'd cover as much of the bell curve as possible. Pricing, like many things, probably follows a power law distribution. So you've got a whole bunch of people who'll buy your $50k product, some will buy your $75k product, but a few would buy a $500k product!

Starting off with a budget and premium option is a great idea, since you get to target both the bulk of the buyers and start eating into your competitor's pie with the premium offer.

You can start off by mirroring your competition and offer a different bonus, like free training if they don't offer it, or something to test how much inventory you can push. If you have no good added value option, you can undercut their price to get market share.

The "generic" brand doesn't have to be too much cheaper to reach a wider audience... If the quality and service are the same (or better) then you can establish yourself as a competitor without compromising too much. You can start with a temporary sale to get your name out there, but with the stipulation that you plan on raising the price.

The name brands serve as a very strong price anchor already for your market, so any savings are good for them. You can start with a 20% baseline reduction and then have temporary supersales of 30, 40, or 50% off to get your foot in the door. Keep hold of those businesses and when they expand you can push your brand.

Another thing you can do is use the other brands as leverage. A lot will buy only 1 since it's a big capital investment, but are some of them who will buy 2, 3 or more to have more volume?

(I'm imagining something like this haha)

hairdryers.jpg

What you can do is offer a conditional discount... if they want to buy the premium product, they get an extra 20% off the budget brand to test it out. You can do a buy two/one get one free deal, so you can get your name out there without compromising the price anchor and starting a bidwar.

That way you can experiment with different prices and see what works better for your audience and build relations for future repeat buyers.

Same logic applies to the upsell.

Use incentives to grow your brand.
 

Kid

Gold Contributor
Speedway Pass
Mar 1, 2016
1,347
1,210
379
Can't you keep the price but offer 3 years guarantee?
 

Kokaka

Contributor
Aug 9, 2019
78
51
45
Charge what the market will bear!

View attachment 35739

Or, well... Finding the right spot for that is pretty hard.

Ideally you'd cover as much of the bell curve as possible. Pricing, like many things, probably follows a power law distribution. So you've got a whole bunch of people who'll buy your $50k product, some will buy your $75k product, but a few would buy a $500k product!

Starting off with a budget and premium option is a great idea, since you get to target both the bulk of the buyers and start eating into your competitor's pie with the premium offer.

You can start off by mirroring your competition and offer a different bonus, like free training if they don't offer it, or something to test how much inventory you can push. If you have no good added value option, you can undercut their price to get market share.

The "generic" brand doesn't have to be too much cheaper to reach a wider audience... If the quality and service are the same (or better) then you can establish yourself as a competitor without compromising too much. You can start with a temporary sale to get your name out there, but with the stipulation that you plan on raising the price.

The name brands serve as a very strong price anchor already for your market, so any savings are good for them. You can start with a 20% baseline reduction and then have temporary supersales of 30, 40, or 50% off to get your foot in the door. Keep hold of those businesses and when they expand you can push your brand.

Another thing you can do is use the other brands as leverage. A lot will buy only 1 since it's a big capital investment, but are some of them who will buy 2, 3 or more to have more volume?

(I'm imagining something like this haha)

View attachment 35740

What you can do is offer a conditional discount... if they want to buy the premium product, they get an extra 20% off the budget brand to test it out. You can do a buy two/one get one free deal, so you can get your name out there without compromising the price anchor and starting a bidwar.

That way you can experiment with different prices and see what works better for your audience and build relations for future repeat buyers.

Same logic applies to the upsell.

Use incentives to grow your brand.
Lots of great points
Also thanks for mentioning the bellcurve. Got me thinking from a new perspective.
One thing that I can offer in the future is the "Starter Clinic Package" since I will start to import furniture like elecrtic treatment beds, chairs, trollies etc. I want to have a one-klick room option where you get 1 full clinic room with everything you need. Thats not offerd by anyone today so if you want a full room, you have to buy from 3-4 suppliers. I cant do that logisticly at the moment however.

The pricing ideas are great. What Im thinking with "Generic brand" is as you say start with a big discount, but keep a price close to the competition as the original.
Lets say my competitors have a 60k machine, I will offer mine for 50k with 30% discount, that should land on 35k which is almost half price of my competitors. Then when I raise prices, I will just raise them back to the "original price".

About bulk sales I am going to do some cold calling to franchises when I get going since I need to have the infrastructure to support a large order.

So yeah. Thanks for the input and hopefully this business will work. Got a loan today so I can buy 4 Demo machines and my webpage will be up and running thursday.
 

Kokaka

Contributor
Aug 9, 2019
78
51
45
Can't you keep the price but offer 3 years guarantee?
Its a good idea but to do that, I need an technician and a place to be.
One thing however Im looking into is to offer 5 years with free spare parts. I am negotiating with various suppliers to see if thats possible. Then I just offer their warranty.
 

Sponsored Offers

  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
This program helped me to triple my revenue over 7 months while also moving to a new city in the...
  • Sticky
MARKETPLACE Fox Web School "Legend" Group Coaching Program 2020
Hi Fox, After reading your threat and watching some of your youtube I have several query ? 1...
  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
If you read the last message then you know I'm removing my courses from Udemy next month. You...
  • Sticky
MARKETPLACE Grow Your Business With a Book (An Unorthodox Marketing Strategy That Built One of the Largest...
PS. what do you think about the idea of setting up live Busking experiences on Air BNB? I could...
  • Sticky
FEATURED! Introducing... WEALTH EXPO$ED, A Short Story By MJ DeMarco
Hi Mj, I just bought it. And reading it. I think is a great idea to write using the stories to...
  • Sticky
MARKETPLACE Kill Bigger Incubator
@Kak Thanks for the reply. Whats interesting is that I have an idea that's been cooking which...



Forum Sponsor

sponsor

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom