How to price your products and services
In the article "The Secret to Small Business Success," by Fire Wheel Design, the author makes a case for why small business owners must not be afraid to raise their rates. The author Josh, explains how he has successfully used what is known as cost-plus pricing in determining the rates for the products and services offered by his website and says that other small business owners should use this method for determining exactly how much they should charge.
Although not mentioned by the article, the alternative to this form of pricing is what is known as demand-based pricing. This is a form of pricing that uses consumer-based demand in order to determine and set the rates. In my opinion, it would be well worth a small business owner's time to consider both approaches before determining the prices of their products. By neglecting consumer demand, business owners are effectively allowing their competitors to seize the opportunity of appropriately positioning their products in the minds (or the "perceptual maps") of consumers.
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Although not mentioned by the article, the alternative to this form of pricing is what is known as demand-based pricing. This is a form of pricing that uses consumer-based demand in order to determine and set the rates. In my opinion, it would be well worth a small business owner's time to consider both approaches before determining the prices of their products. By neglecting consumer demand, business owners are effectively allowing their competitors to seize the opportunity of appropriately positioning their products in the minds (or the "perceptual maps") of consumers.
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