Pricing Tips

One of the most difficult things when one is new in business is pricing. Figuring out what to charge for your product or service is not easy and finding a way that’s fair for both you and your customers is like traversing a shaky bridge.

However here are some tips if you have a great product or service

  1. Price legitimately

Prices should not be “prejudiced” and not be reliant on the type of person that is standing in front of you. Some businesses operate (albeit illegally) with no price tags in sight and customers have to ask how much an item costs. Even the answer is given to the customer after being given the once over. Perhaps, this is expected from a street vendor but a formal business should operate better than this. 

Be fair and act for example like a supermarket; some of the clients walking in are high income earners and others are really poor. The price of the groceries is the same for both sets of buyers. There is no bias towards one or the other.

However, if you are adding value to a service or product for a specific client and not offering the standard off the shelf service do not be afraid to charge for your service; you have legitimately put in the extra work and time.

 2. Talk about money as soon as possible

Overpricing or underpricing is something that every business owner has a deep-seated fear of. With overpricing, there is the fear of being perceived as greedy and potentially scaring off potential buyers. With underpricing after slogging away for hours and days; lowering the value of a product or service is like an insult to all the efforts made and never sits well.

When it comes to how far apart you and your potential client are budget-wise, it can be better to know sooner rather than later. Bring up pricing near the beginning of a conversation instead of at the end to avoid surprises.

  1. Explore what people are doing now

If you over-price the service or product you may just price yourself out of the deal or the market. Even if you may feel something should be priced higher, resist the temptation because if nobody is buying, well… you will not be making money and out of  business sooner than later.

Let the market give you a good indication of what people are willing to pay now instead of what type of profit you want to see. Let the market speak and set your prices.

  1. Resist the urge to ask for your money up-front

Sometimes this method is justified in a special situation or in an industry where it is necessary or standard practice to get funds up-front (like in construction or a business that makes custom made goods). If your business does not require a deposit then do not ask for one; otherwise you will risk giving a bad impression.

Yes, you are honest and always keep your word but, up-front payments, even the small ones do change the atmosphere and may scare away potential customers.

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The founder, editor and lead writer who left university with a good grasp of public administration, economics, money, banking and international relations is also qualified in journalism and creative writing. She has been published in Drum and The BBC Focus on Africa Magazine and has been featured in several local and international publications.
An avid bird watcher with an extraordinary fondness for chikanda ( a Zambian delicatessen that vegans and non-vegans world-wide are putting on their bucket list ) she often tweets in poetry and short prose @kwachalelo