Being able to find the balance between pricing your products and services for a profit and keeping them in a range that will sell can be a tricky process.

2. Steps in Appropriately Pricing Your
Products and Services

3. Being able to find the balance between pricing your products and services for a
profit and keeping them in a range that will sell can be a tricky process. In fact, if
you spend very much time thinking about it, you can feel like you are trying to
balance two very large objects on a playground teeter-totter.
How do you find the balance? You must realize that, although you want to make
money for your business, you need to make sure your products are services are
priced to sell. If your items are priced to high, customers will become
discouraged and will shop elsewhere. If your items are priced to low, then you
either will not make a profit, or you will lose customers because they will think
your products or services are not high quality.
There are actually some very easy steps you can take to price your products and
services in the best way for your business. Follow these steps and you will be
able to make the most of your company.

4. 1. Do your research.
Understanding what other businesses are doing is important. Although
you will not necessarily want to price your products and services just
exactly like the competition, you will want to keep them in a similar
range. This way, you can keep customers from shopping elsewhere
simply because of money.
Research is, by far, the first step you should take in order to correctly price
items of your business.

5. 2. Think about what you would pay.
When you begin to consider pricing, you must put yourself in your
customer's shoes. If you were shopping at the business, would you be
willing to pay what you are asking? If you think about this objectively,
you can get a better idea of just how much to charge.
If you think only of your profit and not what is feasible to a customer, you
are most likely to charge too much for products and services. Be careful
to not overcharge simply because you are out to make more money.

6. 3. Do not undercharge.
Just as overcharging is an easy way to lose customers, undercharging can
be just as bad. Your first instinct may be to find out what the
competition is charging and then price your products or services much
lower.
This is not a good idea for two reasons. First, you will be drastically
reducing your profit, and you may begin taking a loss simply because
you are not making enough to pay the bills. Second, customers will see
extremely low prices as suspicious. They may think that your items are
cheap or not up to par.

7. Make sure that you do not
undercharge and that you stay in a
competitive range.