How Should You Set Your Prices? It Turns Out That Charging More Might Actually Bring You More Business

 Pricing products appropriately is always a challenge and despite having run my own business for the last (almost) three years, I'm still not sure that I've got the right set of numbers just yet.

For me the factors that have the most impact on how I price my products are:
  • Costs: The price that I choose for my products ultimately needs to cover the costs I incur in acquiring them. So for example if I buy a phone for $400 and plan to resell it, the price that I decide to sell it for must be greater than $400
  • Margin: In addition to just covering my costs I need to make a profit to do things like reinvest in the business, pay myself and pay my employees
  • Customers: It is important to understand how much your customers are willing to pay. I recently read an interesting article that suggested that to attract customers businesses should focus on increasing prices rather than discounting. 
 Do you agree that raising prices attracts more customers? How do you decide which price to charge?

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