Use the cost-plus model and follow two easy guidelines for much higher odds of success.
Pricing A Product :
- Determine how much it cost to provide the product.
- Consider how much income per sale would make the sale worthwhile. Consider cost plus time spent developing the product.
- Determine if I will sell a small or large number of products. Small number of products will require a larger profit margin.
Pricing A Service :
- Decide minimum acceptable hourly income. Consider actual time providing the service plus any prep or lost time that wont go onto the invoice.
- Decide minimum acceptable hourly income. Should be at least what I’d make in a similar day-job, probably more. The income needs to be worth the leisure time I’m giving up.
Follow These Pricing Points To The Bank :
- Design my hustle with recurring revenue in mind.
- Consider offering price tiers, where customers can pay more to get more.
- Don’t be too clever – leave the gimmicks to the home shopping networks.
- Don’t stray too far from market prices.
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