What is your goods worth? How much should you charge for your services? How do you settle value of a goods or service? Often this is a very difficult assessment. The old standby answers of, "its value is what man is willing to pay for it," or for a product, "what it costs to make" are not very satisfactory. Do either of those answers positively tell us how to settle value? Do those answers tell us what price to put on a goods or service?
When it is time for you to settle the value of a goods or service, you need to ask some questions about what you are selling. I reviewed some of the questions Mark H. McCormack asked regarding value in "What They Don't Teach You At Harvard firm School: Notes From A Street-Smart Executive" and modified them a bit from my own experiences to come up with this short list of things to think when determining value:
1. What does it cost to produce? While this is not the value, it is a observation when you are determining the value of a product. For a service, you may look at the time and what it costs in time to achieve the service.
2. How unique is it? Is this a goods or service that citizen can buy from competitors? Are the competitors economy than you? What sets your goods or service out from the rest? What is the benefit of your goods or service compared with the competition?
3. How swiftly do your buyers need what you are selling? At first, the experts didn't think FedEx was a good idea. Who would pay extra to have things overnight? Now, speed is an ever addition component to a goods or service's value. I know in our law office, speed is sometimes very foremost to clients and they will pay extra for it.
4. What is the change cost? Something that is positively replaced may not be worth something that is hard to come by.
5. Is this a fad item or an item that citizen will be very passionate about? Is it a excellent goods or service citizen would be willing to pay more for? What is the perception of value of the goods or service? Sometimes raising the price of something creates value because citizen expect it to be worth more due to the higher price tag.
6. Is this a one-time deal or something that will continue on into the future? Are you trying to create a connection with the consumer to continue with products or services? Do you sell a printer for less because you will make money selling ink into the future?
These are only a few considerations when determining the value of a goods or service. Don't be afraid to price something higher if that is the value you have carefully it is worth. As I stated under amount five, the higher price may in fact help sales due to consumers believing it has more value because of the higher price tag.
Even after you think all of the above as well as other variables that pertain to what you are selling, there is still a bit of guess work complicated in setting the "right" price. Hindsight can prove your price was too high or too low. Too high and you can always reduce the price to get rid of inventory. Too low and you can raise the price for future consumers, or at least know good next time.
Determining value is not an exact science. However, if you think some of the questions presented in this record you will have a good grasp of how to price anyone it is you are selling.
