When I first started my online business one of the things I struggled with the most was pricing my products and services. Lacking the confidence and experience that I needed to truly understand the value of my products and services, I did what most new online entrepreneurs do.
I looked at what everyone else was charging and figured, “that’s what I’ll charge too!” Boy, oh boy, was that a big mistake. Thankfully, it didn’t take long for me to determine that I had to determine the value of my products and services myself.
In today’s video I’m going to share some insight on why new entrepreneurs typically fall victim to this pricing plague. Take a look and be sure to leave a comment about your pricing woes if you have any, or how you’ve gone about pricing products and services in your online business.
Also, be sure to check out my online business pricing “Quick & Easy Guide” below, AND my super duper amazing special offer for FREE COACHING. Okay…watch now!
Marlee’s Quick & Easy Guide To Pricing Products & Services
So now that you’re ready to establish the right money mindset for pricing your products and services, here are few key components that you need to look at when creating a pricing schedule.
First, set your price based on the value of your time and expertise. If you don’t set your prices in a manner that adequately compensates you for your time and effort, you are going to become a slave to your business. Make sure the price of your products and services are worth whatever you put into them.
Second, look at that number you set from your determination in step one and make sure that it covers your overhead, expenses, and investments. Essentially make sure your cost of production is built into your price so that your margin makes you profitable.
Third, look at what you’re offering and make sure that you’re providing a bit more value than you’re charging for.
Fourth, define your ideal customer and doggedly pursue them. You need to make sure that your ideal customer and your offering are a match. For example, if you are trying to reach low-income students with your “get into college” training program, you better make sure that your business model and pricing structure will match what they can pay.
If you’re selling a high-priced product, then you better make sure your ideal customer includes people with the income to afford it. Once you’ve identified these ideal customers market to them like mad. This will make all of the difference in your ability to charge what you are worth.
Fifth, take a look at what your competitors charge. Do this so that you can see what type of value they are offering for what they charge. This will help you articulate why your offering is better or different from theirs. Do not do this as a means of setting your own pricing!
Lastly, check yourself. If you are worried that people will want refunds, feel gypped, or regret their purchase maybe you’re not providing as much value as you should. If you do your work with excellence, and can meet your customer’s expectations you should have nothing to worry about. Confidence and character go a long way in being able to charge what you’re truly worth.
Now, for my very special offer to you. I’ve spent all this time talking about pricing, but now I’m going to talk about FREE. If you need some help in your online business, but just can’t afford one-on-one coaching, I’ve got a special offer for you that you don’t want to miss. To learn about how you can get in on some free online business coaching click here.
Did you find today’s post helpful?! If so, please be sure to share it with your friends, fans and followers. 
Thank you!
{ 22 comments… read them below or add one }
I prefer to charge a bit more. But when I do I know my customers expect more. So I have to be on my toes all the time. Service service service lets me get away with a higher charge.
Great post! Often I see people whom are either under-priced or over-priced for their services…. no one seems to ever be perfectly priced.
look at what you’re offering and make sure that you’re providing a bit more value than you’re charging for.
This is the best tip for me. A lot of people just do what is required for the payment, but few go the extra mile and that is nice to see. I’m not saying go and do something that’s worth a whole lot more aas a service but make the client feel nice. For example, if you make baked goods, why not put a cute little note in the batch you are making for someone not feeling well etc. Small thoughts like that make you remembered.
Lovely post, time to ReTweet.
Gabi
Thanks for sharing this, Gabi! And your example for adding value is excellent, because it shows that you don’t have to do a TON to add value. The little things can go a long way!
Nice post Marlee, you’ve got a knack for choosing great topics for your blog, kudos to you
I don’t own a business, although it’s something I’ve been flirting with! But if I did, I’d be sure to follow my own rules. Sure, I’d learn from the best, and how not to do it, but ultimately, the final say would be mine. I say this because I follow this mantra, “If you can’t decide on what your dreams are, others will decide your dreams for you”
Take care Marlee
Thanks Stu!
People have really been enjoying the content lately which always makes me feel great. I appreciate your feedback. With all of the knowledge you’re gaining, you’ll kick butt when the time comes for you launch your own gig. Go ahead and flirt some more…owning a biz can be a lot of fun – and it’s rewarding too!
THANK YOU for such a useful, and fun, and amazing video. For saying it like no one else says it. You are AWESOME, awesome, awesome on video, Marlee and I think you have the *best* set of videos for the new entrepreneurs – thank you for helping me put prices on my coaching packages online. Hugs and keep it up and stay gorgeous!
Thanks Farnoosh! And thanks for stopping by. The blog is always a bit brighter with your insight.
Hi Marlee
Well said – not sure what the UK equivalent of a “Five & Dime Store” is, probably a pound shop, but you are right.
I read somewhere that to cheer yourself up… raise your prices.
If you can deliver what you promise, why not?
Cheers Marlee
Hiya Keith,
Yep, I’m referring to that of a pound shop. And yes, if you are truly delivering value then you have nothing to fear. That is one of the reasons I offer a money back guarantee on my coaching services. I strive to give so much value that I never have to honor it!
Marlee – Great info on something that I frequently struggle with. It’s so hard not to second guess yourself or to worry that people laugh in your face if you set your prices at what you’re really worth.
If you really know your market/target customer, what products you’re competing with and what kind of value you’re providing, it should be a no-brainer!
Exactly, Sarah! Thanks for your insight here.
Marlee,
You have been dropping some serious content here recently. I am overwhelmed by all the depth you have in these post. Funny thing is they are always right on time. I didn’t have a clue on how to price products so I was just going to start high and test the market and adjust as necessary. I think this approach is a lot simpiler and clean. Now I just need to find something to sale because the chicken and waffle business isn’t working out in my front lawn. lol! This was hot! Thanks
I’m glad you found it useful, Frank. I’m think your due for a mini biz makeover, cuz these chickens are gonna drive me crazy! LOL
Marlee you are so right! Especially about not just parroting the prices of other established people in your field.
When it comes to art, even though many times I thought my stuff was as good or better than some of the big guns out there, there’s a perceived value that you really can’t overcome except by getting out there and raising your profile and being published traditionally.
But it does feel good when you’ve got enough steady work that you can “lay down the law” with your prices and not have to negotiate. It must mean you’re doing something right
Thanks for the vid!
Hey JG!
You bring a good point. Building your authority is not just essential to your perceived value, but it also will affect how you perceive yourself. Seeking authority building opportunities will only give you more to stand on in your online business.
You’re also spot on about not negotiating. Typically, if you’ve done your homework (because you’ve got your ideal client), you’ll get to a place where people won’t even attempt to negotiate your pricing. If you’re still seeing a lot of price resistance, however, it’s an indicator that your missing the boat with your target audience or you’re prices really are out of whack. Ultimately, getting to a place where people are not trying to nickel and dime you is where you want to be.
Awesome, this is one of the top 5 questions for any business (on or offline).
Your first point is my favorite, don’t look at what the others and their prices, set it your time and expertise. As a coach it’s a tricky question for a lot of business owners, depending on their self-esteem levels (ya! I just got a new client or No! I just lost one) the answer can really vary.
So yes to the perceived value not just from others but our own perceived value and how great we think we actually are
Off to RT this as I know many peeps it could help.
Thanks for the RT here, John. I totally agree, it’s a hot topic. And yes, our own self-worth plays a HUGE role in what we are will to call of the work we produce. That’s one reason why cleaning up head issues (especially in a coaching business) is key to getting paid what you should.
Marlee – excellent message. I’ve never created my own products or services, although I do have something in the works
, but like you mentioned you definitely have to know what your price point and how much you’re worth.
I honestly think this is critical because although we always want to under promise and over deliver, setting yourself at the right price points and actually having your customers pay for your products implant a very different perspective about what is possible for you as an internet entrepreneur, especially if you’re just starting out or if you’re introducing your first product to the market.
I’ll definitely be doing my research when I come to introduce my product to the market.
PS: What do you think is the best way to research at what price point you should introduce your products to the market?
This is going to sound ridiculous. But in my opinion, the best way to research your price point is to ask your target market. Hopefully, you’ll have a community of sorts that you can communicate with via e-mail. Tell them what you’re up to, suggest a couple price points (strategically using the guide in this post) and see what gets the most votes. As long as you get a healthy number of responses, it’s pretty safe to say that whatever gets the most feedback will also sell the best at that price point or something near it.
…and she does it again!
One of the most difficult/important parts to decide upon in a new business is price. It’s important that your price is right: too high, and you allow too much room for competition to undercut; too low and you devalue your services (or products).
It comes down to understanding the industry, customer base, competition and being honest with your own ability and fit within the marketplace.
What do I know? Not much – but I know that this topic is one that a lot of people need to learn about…including myself! Thanks for the vid and write up Marlee
PEACE
Thanks Jk!
Price is very difficult for people to assess when they start out. Testing your offerings is another great way to figure out your ideal pricing schedule. The idea, however, is to figure out what works for you and your business.
As ALWAYS thanks for your great comment Jk.