PRICE YOUR CONFIDENCE LEVEL

Pricing is one of the many things entrepreneurs battle with today.
Many are scared of pricing too high at the same time, they do not want to charge below cost price while many more want to maximize profit.
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Basically, your price is cost of production+profit. Where the issue lies is what to add as profit to the cost of production.
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In my experience as an entrepreneur and a business strategist, it is best to CHARGE YOUR CONFIDENCE LEVEL.
This what I mean.
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The price of your product or service is directly proportional to the level of confidence you have in the solution it provides. In other words, when you price your product and service extremely low, sometimes it communicates that you have little or zero confidence in the product or service you offer.
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Except in rare cases where your USP (unique selling point) is in pricing like the case of ShopRite or Pep, you should always charge your confidence level. With that, the price of your product or service becomes highly insignificant. What people would pay attention to is the solution you are offering not the price you charge.
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For startups and small businesses, when starting out I often advice that you make your profit 50% of your cost price then you can gradually increase your profit margin to 75% or even 100% as you acquire more expertise, experience and more confidence in what you offer.
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So, if your COP is #10,000, you can start with #5,000 as profit and then charge #15,000 for that product.
Gradually as you begin to receive reviews, new customers and your confidence level increases, you can begin to charge #17,500 (75%) or even #20,000(100%) for the same product.
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In all, be sure that you’re not intimidated into charging ridiculously low price cause your sales would suffer for it. Also, do not be bossed into charging extremely high prices, your sales will bear the brunt. Let your CONFIDENCE LEVEL determine your price, that way your customers aren’t bothered about price, they are too joyed with results.

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