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Pricing High or Low when Launching

Discussion in 'General Entrepreneur Discussion' started by Laughingman21, Mar 22, 2019.

  1. Laughingman21
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    Laughingman21 Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I'm getting ready to launch and I've now started to get some doubts over my pricing strategy. The products I sell are branded items already on sale from other sellers. To keep fulfilment costs down (per unit) and encourage customers to buy more than one item at a time, I've been planning on offering products at a higher unit price, but then give discounts for orders with multiple units per product in an order. This also gives me the benefit of higher profit margins if people only order one at a time.

    However, after looking at competitors websites and seeing their lower prices, I'm starting to doubt myself. I'm worried that I'll price myself out of the market. However, if I do that, will I put off new customers with price increases later?

    I know I need to launch and just test what the market does, but I'd love to know you're opinion on pricing at launch. Do you think it's better to:
    • Price High - then drop prices later if I'm struggling for sales
    • Price Low - then try increasing prices once I've got sales
    Any thoughts, opinions or experiences would be great.
     
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  2. B. Cole
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    B. Cole In thine hand is power and might. Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Watching because I’m about to face the same decision dilemma. I keep telling myself that the value proposition is worth the higher price (I can’t even manufacture mine for what my competitor costs retail).

    Any way you can solicit feedback from your target audience? Almost very decision I’ve made so far was with the actual customer’s input, working great because the product is for them.
     
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  3. Laughingman21
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    Laughingman21 Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Anyone?
     
  4. SolopreneurGrind
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    SolopreneurGrind Contributor

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    I think you really need to think long and hard about how you want your products/brand to come across to consumers. Unfortunately there's not enough info for me to answer this for you, but are you selling a:

    1) cheap commodity
    2) luxury/specialty product

    What I mean is: are you selling something that is just like the others, or is yours unique/higher quality/special in some way?

    If you're #1, your product is just like the others with a brand name on it and you can't manufacture it for cheaper than others are selling it for, you're in big trouble.

    I'm hoping you're a #2, in which case price sensitivity isn't as important, because if you can truly show the added value, benefits and features of your product, you should be able to sell it for a higher price. This is the same reason people pay more for a Mercedes than a Toyota.

    Hope this sheds some light on it, let me know if you need more info!
     
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  5. richRich
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    richRich Contributor Read Millionaire Fastlane

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    As soon as you can clearly communicate to your customer why your product is worth more, your doubt should vanish and you will stand behind your prices.

    Generally, I'd say that customers don't like price increases. You will definitely upset existing customers and potential customers who already saw the old price. New customers will bring more money, though. It's a trade-off that is very product-dependant and that must be calculated thoroughly.
     
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  6. Jaden Jones
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    Jaden Jones Igloo Builder Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Like everyone else, its tough to say without knowing what you are selling, I would always lean to being a little cheaper to increase your customer base, I dont mind small price increases at a website im familiar with that checks all the other boxes. I dont mind paying a a couple % more for convenience and trust. You will find most good customers care more about the service and experience than the price, if all the care about is price, your selling a commodity.
     
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  7. Wiggly0607
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    Wiggly0607 Contributor Read Millionaire Fastlane I've Read UNSCRIPTED

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    Just an aside, but aren't you violating the commandment of control here by engaging in a commodity business? This would be why you are having such a difficult time with price-it is determined by your competitors largely.

    Sorry, not trying to hijack thread, just some thoughts re: the bigger picture.
     
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  8. Laughingman21
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    Laughingman21 Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Thanks for the responses. Just to clarify, the products I'm selling are not my brands. They're other companies brands that I'm reselling, hence my doubts over the pricing.

    I don't want to get into a price war with competitors are end up in a race to the bottom on pricing. No one wins. Instead, I want to offer value in different ways and hence try to justify a higher price.
     
  9. Laughingman21
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    Laughingman21 Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Ideally, I'd like to produce my own product and sell it, but the initial costs are too high. I thought the best way to generate some money would start off selling existing products and learning about the market which has the added benefit of giving me market knowledge. This should help in the final product development (when I get to that stage).
     
  10. Neng Her
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    Neng Her Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Have you launched yet or has the pricing stopped you?
     
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  11. MHP368
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    MHP368 the man, the myth, the Pseudo-Apollodorus Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    well how are people finding your product?

    am I just googling it? if so the competitors offer is right there

    is it on amazon? i'm too lazy to leave the site so if its on page 1 i'm sold

    Did I have to fight through a sales funnel and 2 pages of copy? price it however high you want , i'm still here right?
     

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