How to set the price for your product

From 37 Signals’ founder Jason Fried:

The good news about pricing is that you can guess, be wrong, but still be right enough to build a great sustainable business. Maybe you’re leaving some money on the table, but, like my dad always says, no one ever went broke making a profit. However, you are not allowed to ask people:

  • “What would you pay for this?”
  • “Would you buy this for $20?”
  • “How much do you think this is worth?”
  • “What’s the most you’d pay?”

And these are the questions I hear people asking over and over. You can’t ask people who haven’t paid how much they’re willing to pay. Their answers don’t matter because there’s no cost to saying “yes” ”$20” “no” ”$100”. They all cost the same – nothing. The only answers that matter are dollars spent. People answer when they pay for something. That’s the only answer that really matters. So put a price on it and put it up for sale. If people buy that’s a yes. Change the price. If people buy, that’s a yes. If people stop buying, that’s a no.

4 thoughts on “How to set the price for your product

  1. Pingback: When no need for capital = negative growth signal | A Founder's Notebook

  2. Pingback: Never ask if someone would buy your product | A Founder's Notebook

  3. Pingback: Pricing your product? Don’t be afraid to ask for a *lot* of money | A Founder's Notebook

  4. Pingback: Three approaches to pricing | A Founder's Notebook

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