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.
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