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eppie
03-04-2014, 12:06 AM
This is address to those who offer services as a product.

It's quite easy to price a tangible product because you have something to start with like the buying cost or manufacturing cost, etc.. But when it comes to service how do you determine your "selling price".

Do you sort of spy your competitors and based your price a little lower or higher. Or do you compute by the number of hours that you will devote in delivering your service and multiply it to $10 or $20 depending on your hourly rate? (I hope you get what I mean. :D)

By the way, the service I'm talking about is Wordpress blog complete set-up (including content). :)

Taru
03-05-2014, 03:15 AM
I used a combination of all methods when I was determining the price of my hourly rate at first. At the start, I tried to see what my competition was charging, and I considered asking a lower price at first since they presumably already have a lot of experience at the time. Next, I also looked at the local market and my own personal needs and expenses as well to see if the price would be a good enough amount to cover them and still acquire a good amount of profit enough for me to see it as being worth it. I think any amount you think would be fair to you and your potential customers while still being able to be competitive with the rest of the competition would be good.

ab123
03-06-2014, 08:40 AM
Generally for a service your price is Materials + Time + Expertise. I would start by looking at what others are charging to get an idea.. So, for building wordpress sites your overhead is probably pretty low (just a computer, electricity and a workspace, most likely), so think about the number of hours you'll spend on a project and set a reasonable hourly rate for yourself based on your experience. Remember that beginners take longer to complete a project, but a beginner's time is worth a lot less than an expert so experts should still charge more per project.

Chia
03-07-2014, 03:10 AM
As someone mentioned above you should take into account your competitors, your experience, and your quality of work. Decide how much will work for you taking all those things into account. If you charge more than competitors, explain why. Sometimes people will pay more just because they know it will be quality work and will be delivered on time.

Rainman
03-07-2014, 03:14 AM
For the sort of service you're offering I think it would be best to price your services a little lower than your competitors at the start. This is because, if you set your prices too high someone will just go to freelancer.com and hire a desperate expert at very low rates. That's why when you're starting out, you need first to establish yourself [by setting your fees a little lower] before either increasing the fees you charge or outsourcing the work and getting a cut from the fee charged.

mikelouis
03-07-2014, 03:24 AM
It all depends on the quality and also how your competitors are pricing their services. You do not want to overprice or under price your services. If they are overprice then people will not buy them due to they are expensive then if under priced people will think they are fake.

eppie
03-07-2014, 07:19 AM
Thank you for your inputs guys. :D

I'm now making a list of things to consider. I know I can't just price my product based on my hourly rate because If I do - My complete service will cost over a $1,000.00. I'm quite certain that others can offer it for a whole lot less. So I guess I have to offer it for less in the beginning and build my online reputation first so I can command a higher price in the future. ;)

Eagles910
03-07-2014, 08:03 AM
This is address to those who offer services as a product.

It's quite easy to price a tangible product because you have something to start with like the buying cost or manufacturing cost, etc.. But when it comes to service how do you determine your "selling price".

Do you sort of spy your competitors and based your price a little lower or higher. Or do you compute by the number of hours that you will devote in delivering your service and multiply it to $10 or $20 depending on your hourly rate? (I hope you get what I mean. :D)

By the way, the service I'm talking about is Wordpress blog complete set-up (including content). :)


The best way to determine the price of your service is to examine the prices that your competitors are offering. This will determine the market value of your service. From there you need offer a price that is competitive with market value. If you choose to go over the market value. You will not receive much business. Especially in this economy. People are looking for all of the bargains they can find.

JohnSword
03-10-2014, 03:19 AM
Looking at what your competitors are charging is definitely one of the factors when it comes to determining the price of your service. The key is figuring out what’s going to get you the best penetration in the market as fast as possible, and broadening your client base according to what your competitors are not doing with their pricing models.

At the same time, you don't have to commit yourself to a single price. Tiering your pricing structure allows you to sell your services to people early on the notion of a price, and then add options that ultimately will help you increase your bottom line.

fredkawig
03-10-2014, 10:19 AM
You need to look at the expenses that you have and then do some markups or even just a little above breakeven, if you're offering a unique product you can increase your price range to have good income.

Eagles910
03-10-2014, 10:54 AM
You need to look at the expenses that you have and then do some markups or even just a little above breakeven, if you're offering a unique product you can increase your price range to have good income.

Raising the price has no value if you are not selling any products. You are not going to sell any thing if your price is an excess of market value. If you are selling a product that does not net you profit at market value. You should not be selling that product.

Lostvalleyguy
03-10-2014, 05:16 PM
There are so many questions, and so few answers to this topic.

I provide a service and not a product so there isn't a cost of materials component for me. I look first to my competition. I don't only look at the price they are charging, but the details of the service they offer. Hourly rates range from less than minimum wage on up to excellent wages, but the quality of the service providers varies as well. I look at my expenses. How much money do I need to make it through the month and how many hours will I have to work to do this. I also look at my client base to get a feel for what they would be willing to pay. If I were to relocate to another city or even a different part of the city, the affordability of my services may change. Housing prices and the types of shops nearby can give you an idea of what people can afford.

If you are getting too much or too little work, adjust.

eppie
03-14-2014, 09:22 AM
The best way to determine the price of your service is to examine the prices that your competitors are offering. This will determine the market value of your service. From there you need offer a price that is competitive with market value. If you choose to go over the market value. You will not receive much business. Especially in this economy. People are looking for all of the bargains they can find.

This is very true - People are always on the lookout for bargains or even freebies. They always want to get the most out of their money which sometimes not reasonable anymore. :( Anyway, I'm now looking or considering the idea of offering service packages. From basic to full service package as I think this will help me negotiate better with bargain hunters. :D

alec
03-18-2014, 12:37 PM
Looking at the competition can be tricky. The price they ask doesn't necessarily reflect the quality of the service. Maybe you tend to offer some free advice too, maybe you install some additional plugins to secure the blog - all these should reflect your price. Personally I think it's a matter of testing. Offer your services, see how people react and how much would they pay, then modify your asking price accordingly. And don't forget to factor in the time you spend doing it, that matters too.

Your best bet would be to join sites like freelancer and have a look at the top freelancers in the Wordpress category, that should give you a great perspective on prices and work value.

idlecuriosities
03-18-2014, 12:56 PM
I think this takes a little bit of experimentation to figure out. You probably won't have the perfect pricing when you first start out. I don't think it is a bad idea to look at competitors and price similarly. What I would really focus on is doing a really good job with your clients, that way you can justify whatever prices you decide on.

angelicagapit
03-19-2014, 03:21 AM
It's always good to base your prices as compared to your competitors. Competitor analysis is important when you start a business so that you know who you're up against. You should be competitive when it comes to pricing, and service versatility. Try to also have great client service so people would prefer going to your business rather than your competitors.

In terms of determining the prices of your services, make sure your price covers the cost of your efforts and electricity expenses.

Good luck!

crimsonghost747
03-22-2014, 06:38 AM
Okay, so your service is something that is on the internet, therefore 0% local. You can't go lower than everyone else, since there is always an Indian guy willing to work for $3/hour. Reputation is THE ONLY way to go. I'd suggest doing a couple of jobs for free, this way you have real projects to display in your portfolio and assuming you did a good job, a couple of potential future customers.

autograph
03-22-2014, 09:45 AM
The very first thing you have to consider is the actual cost of providing your service to the customers. In order to maximize your profit, you have to check the ongoing market rate for the type of product you are offering. From here, you should have a rough idea on what is the range of price that people are willing to pay for your product service. I would recommend you to diversify your price range for various features of your service. It should widen your market targets and increase your customer base.

eppie
03-24-2014, 09:40 AM
Okay, so your service is something that is on the internet, therefore 0% local. You can't go lower than everyone else, since there is always an Indian guy willing to work for $3/hour. Reputation is THE ONLY way to go. I'd suggest doing a couple of jobs for free, this way you have real projects to display in your portfolio and assuming you did a good job, a couple of potential future customers.

:lol: I see your point... Personally, between a $3/hour web designer and a reputable/proven (but higher rate) one, I'd still go for the latter. Anyway, I really don't have good experience with bargain hunters, they're usually the more demanding ones. :roll:

garfish
03-24-2014, 11:48 AM
$1000 is way to much though. Its best to check the competitors prices.
But with this amount, I can provide SEO services apart from hosted wordpress setup and guarantee a spot on the first page of search result to a long tail keyword.

centralnetwork
03-25-2014, 12:31 AM
Generally for a service your price is Materials + Time + Expertise. I would start by looking at what others are charging to get an idea.. So, for building wordpress sites your overhead is probably pretty low (just a computer, electricity and a workspace, most likely), so think about the number of hours you'll spend on a project and set a reasonable hourly rate for yourself based on your experience. Remember that beginners take longer to complete a project, but a beginner's time is worth a lot less than an expert so experts should still charge more per project.

Some times we disdain expenses that might be overwhelming with the pass of the time. Electricity is not that cheap in many places, and a computer may need to be replaced or repaired overtime.

While I do agree that pricing should include materials and time invested, plus one's expertise, each an every piece in your business setting counts, including the price someone is paying for the Internet connection.

Someone said that whether you are selling a service or a tangible good, it is a good business practice get your average cost for each piece of job and multiply it by three, so you can get paid a fair price.

marksamray
05-17-2019, 09:23 AM
The price you charge for your product or service is one of the most important business decisions you make. Setting a price that is too high or too low will - at best - limit your business growth. At worst, it could cause serious problems for your sales and cash flow.

If you're starting a business, carefully consider your pricing strategy before you start. Established businesses can improve their profitability through regular pricing reviews.

lincy
05-20-2019, 05:24 AM
You can analyse the price of competitors and determine the price of your services based on the quality of service you offering to the customers.