How To Price Right If You Have No Idea What To Price At?

One of the most important ingredient in a good marketing plan is PRICE. But the question that causes sleepless nights and endless stress remains – how do I know what is the right price?

For some companies, that answer can be obtained through market surveys, either surveying consumer opinion or market price distribution. But what if your product or services do not fall into any easily classified categories?

In my previous post on “Are You Sure Your Price Is Right?” this dilemma is a common one in the creative industry. While we continue to struggle with this, I recently found out from a friend how he managed to solve that major issue. His solution is so simple that it defies logic. I would like to share it with you. However, do understand that this technique cannot be applied in every case. But this serves to show you, that innovative solutions do exist, and that your concerns are not insurmountable.

I came across www.realamber.sg, a site that specialises in Amber jewelry. That by itself is not unusual. But what is really unique about this site, is the way you purchase stuff. Instead of fixing the price, they have decided to let the market decide what price it wants to pay! I think they called it their “Name Your Price” system of selling.

How it works is very similar to a reverse bidding system. Unlike a traditional auction, where the highest bidder walks away with the prize and each bidder bids higher than the previous one, this Name Your Price system is different. For example, if you fancied the  US$212 Amber Bracelet, you can go in there, and make a bid for it. If you felt that US$198 is all you are willing to pay, put in your bid at that price. If the system (as defined by the owners) agree, you got the US$212 item for US$198! This brings price haggling into the cyber age!

Well, I hope that this has given you some ideas about how you can also manage your pricing. The key take-away here for me was, instead of forcing his customers to buy products at his price, our enterprising marketer has allowed the market to dictate the price.

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[tags]price strategy, price, pricing, how to price correctly, best way to price[/tags]