Help! How should I price my products and services?

For freelancers, entrepreneurs, and small business owners, pricing products and services can be challenging. The bad news is: I can touch on it in this blog but the thinking out there is so diverse, I could never give you all the answers. But I can at least try to get you heading down the right path and maybe give you some ideas. And I’ll revisit this question from time to time.

Most small business owners know that pricing products and services too high will scare people away. After all, no one wants to spend too much on something when they can get the same thing for much less. Instead, most small business owners will charge too little, hoping that their lower price attracts buyers and eats away at the competition.

Neither of these strategies are good practices for about 80% of the market. A middle range price for your products and services is best. Here’s why:

• Low-cost provider is not always the best option. Low cost providers have to have a sharp eye on all expenses. And, their customer loyalty is out the window because customers who shop based on the lowest price will switch as soon as someone cheaper comes along. (And FYI: someone cheaper will come along sooner or later).
• High-cost provider can be challenging to deliver to expectations unless you are really reaching the luxury market with effective marketing and targeted publicity.

So find out what the price range of your products or services is and stay in the middle. Drop your prices slightly to give occasional incentives, but keep them in the middle.

It’s worth spending time online to find out what other people are paying your competitors for similar goods and services. Don’t be tempted to set your own prices based on a “thumbnail sketch” of prices. Spend the time. Chances are your prices will end up higher than you were expecting, so that research time pays for itself!

Being in the middle also addresses the issue of profitability: It’s actually the most profitable place to be! If your prices are too high, your profitability will actually be fairly low because you’ll have to work a lot to acquire just a few customers. And at the lower-priced tier, you’ll have little or no profitability when you cut your prices as low as they can go. So, you’ll enjoy a volume of customers at the mid-range level with enough built-in profitability to make it worthwhile.

Jessica Routier, IAC-EZ

FAQ: “Should my expenses be imported as negative numbers? ”

FAQ is a regular blog feature that answers frequently asked questions and makes them available as a growing list of tagged blogs.

No. When you import your expenses to your expense account, you are “adding to” the total expense. This total expense, in turn, will be deducted from your income.

If your CSV file contains negative numbers that you do not need, simply uncheck the option to to import negative amounts as negative numbers, on the CSV mapping page.

Do you have a Question? Please email it to support@iacez.com.

Giving Back Report

Each month, IAC-EZ highlights a specific charity and then donates a portion of the proceeds from new clients who have signed up in that month to that charity. It’s a rewarding experience for the new client to know that they’ve contributed to a worthwhile cause and it’s a rewarding experience for the charitable organization that can put the funds to good use.

In April, IAC-EZ had 168 new clients sign-up. Proceeds from each of those new clients went towards The Well Project. The Well Project is an organization whose mandate is to help women with HIV.

The number of reported HIV cases has tripled in the two decades between 1985 and 2005, and it is estimated that there are over 20 million women with HIV in the world today.

With grievously high numbers like that, it’s hard to see how what impact a small drop in the bucket can do… But our contribution can make a difference. Thanks to the donated proceeds from last month’s 168 sign-ups, The Well Project can provide more women with more information to make the necessary changes, take the necessary precautions, or pursue the necessary opportunities that can help them lead healthy lives.

Jessica Routier, IAC-EZ

FAQ: “Does IAC-EZ have different set-ups for different types of businesses?”

FAQ is a regular blog feature that answers frequently asked questions and makes them available as a growing list of tagged blogs.

No. We currently have one version, and one pricing plan. However, if you have a special need, please feel free to contact our support and we will see what we can do to help your business.

Do you have a Question? Please email it to support@iacez.com.