Author: Carmen Lecuane
We live in a world where most products are mass-produced by faceless corporations that employ thousands of people led by titans of industry. But that is shifting.
I personally own a brand that from Production to fulfilment is done by a one woman show, and I know many of you are in that position too. And before going into the politics of women being underpaid, let me ask you a question?
- Do you factor in the hours you put into your business and put a numerical value to It? Or are you selling your product not including that in the price tag?
Valuing a product is simple on paper but difficult in reality. When we think about our products — building them, selling them, and especially valuing them — we tend to take ourselves out of the equation. We need to make the pricing process self-agnostic on both a personal and company level without the mentality that “expensive” will not sell or appeal.
I disagree, instead we should price based on the value of the product, and the volume of the effort and also the magnitude of the idea.
The customer with zero stake in the quality of the product, the one who is making a decision strictly on price is not your target customer. If we’re the cheapest option, we will win their business every time. But in long run isn’t that exhaustive. Adding value to others but not to yourself, are you actually making any profit?
There is only one problem: If we rely on these customers, we can’t raise our prices. Ever. The moment we do, we immediately lose a disproportionate segment of our customer base. It doesn’t matter if we triple the functionality of the product, because that’s not why our customers bought it. It’s devalued.
They bought it because it was cheap. Furthermore, those other customers who passed on you the first time? They will never shake that first impression of low quality. Luxury is normal, we all should aim to give ourselves the best of the best. And so should our customers, give them the best.
Being expensive is a much easier problem to have, as long as we’re the premium option. And startups should be premium options. As a startup, we’re either adding necessary value that the incumbents and competition don’t, or we’re creating a market that didn’t exist before. If we’re not doing one of those things, we’ll never survive no matter the price.