The Fine Art of Pricing Your Product
Entrepreneurs face two major dilemmas when deciding what they should ask their customers to pay: How to price and whether to lowball
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Pricing (BusinessWeek.com, Winter, 2006) is always tough. To do it right, you have to have a basic indication of what the client is willing to pay, and you've got to have data on the benefits the product will provide. But how do you do it if you're starting from scratch? And how do you decide whether or not to lower a price you've already established when you find yourself in a competitive situation? Those are two of the most common pricing dilemmas facing entrepreneurs. In the examples below, I offer advice on how to handle them.
Pricing Dilemma No. 1: How to Price?