1. Look at your competitorsâ€™ prices and get a range. According to Johnson, â€œYour consumer has in their mind some idea of whatâ€™s the right price to pay for your product and if your prices are going to be dramatically different, higher or lower, youâ€™re going to have problems.â€
2. Objectively compare your product to your competitors. Compare features that a consumer would notice and value. Determine if your product is better than similar products, or is it lesser? Donâ€™t be emotional when comparing â€“ itâ€™s not better just because itâ€™s yours. If you canâ€™t clearly specify what makes it better, then itâ€™s not better.
3. Decide how you want your product to be perceived in comparison with your competitors. Are you the â€œqualityâ€ brand? The â€œlow-cost cheapâ€ brand? The â€œvalue-addedâ€ brand? Your website should reflect your conclusion. Your customers wonâ€™t pay top prices for an item from a shoddy-looking website. But if youâ€™re going to be the budget brand, you donâ€™t want a tricked-out, fancy website â€“ just something simple.
4. Calculate your costs. Whatâ€™s the cost of goods if you buy this many vs. this many? Whatâ€™s the cost of shipping? Factor in the variables â€“ any costs you forget come directly out of your profit margin.
5. Determine the quantity you need to sell to make a profit by looking at the price range you can charge and the costs of selling your products.
6. Take a reality check: Ask yourself, â€œGiven what the market is willing to pay and what I think I can sell, can I make a profit?â€ If not, you did your research, thought it out, and saved yourself a lot of wasted time and money â€“ move on. Look at something else.