Setting Prices for Products & Services

A price is known as the amount of money a seller charges for a product or service. The asking price is not always the amount of money the seller will receive for their products or services. Many consumers are becoming better negotiators which mean they tend not to pay the price appearing on the item. Therefore, price can also mean the amount of money consumers pay for a product or service.

Remember that consumers usually determine if the price is right. If the price is too high or even too low, then consumers generally will not buy your product or service. Therefore, it is important that careful consideration be given to the prices you set because if prices are set improperly, your products or services may have very little chance for success in the marketplace.

General Pricing Methods:

The five methods which your enterprise can choose from when setting prices for your products and services are presented below.  Examine each to determine which approach is approximate for your particular business.

• Markup Pricing
• Break-even Pricing
• Perceived Value Pricing
• Competitor Pricing
• Billable Hours Pricing