Pricing a product or a service is one of the most important tasks. It’s not just about the bottom line, it’s also the positioning, reputation and perception of what you have to sell.

As I visited few forums, I found this article about pricing

What they talked about is that you need to look at your cost and the bottom line in order to price something.

As always … I started writing a response and then decided to post it here.

I think that even though pricing your product based on your cost is a valid suggestion (you do need to profit), it can not be the only factor.

A business owner needs to evaluate the market. He/she needs to decide how to position the company/product and the price plays a big role. If it’s cheap you fall into one market and if it’s pricey you’re in the different zone.

There are people who shop for the same kind of products in WALMART and then there are those that buy same products in Harvey’s where electronics are overpriced just because they cater to a different crowd.

Your price will say a lot about the business. So once you calculate what the minimum price should be to cover your costs, start evaluating all the other factors.