How to set a price tag before going to launch a product in the market?

Question

Regarding software product, how to set bottom price, retail price and cost of a software.

Answer 1

First you need to figure out what your costs are to develop and maintain it: based on how many copies you plan to sell, what price to you need to charge to stay in business.

Then sanity check that with other comparable products in the market. If your charging more, then make sure the buyer will see the extra value that the extra cost justifies.

Answer 2

Price and cost are a function of your ability to maintain cash flow. AOL gave its software away for free because their income stream was from the subscription services.

If your product is a POS product you need to recoup your investment from the software itself. What costs will you incur from distribution? Do you have the production capability to supply an Office Max? Simply having a software package and setting a price is easy. Getting the product out and supporting it is where your real costs come from.

Remember prices are simply something that you put on a piece of paper. They mean nothing unless you can support them with advertising and product.

Answer 3

Your cost of manufacturing is exactly that. How much does it cost to actually make your product. Wholesale is the cost at which it is sold to the retailer. You want to cover your cost and still make a profit. Next comes the retailer. What is the current market price for similar products? You want to be competitive, but still allow your retailer to make a profit. But you don't want to price the product out of range so that no one will purchase it. Do a cost comparison analysis and then determine your cost, wholesale and retail (MSRP). Good luck.

Answer 4

Simply put you can price what the market will pay. If there are any comparable products you will have to undercut or match to gain clients and establish yourself. Once the quality kicks in then you can position and build your brand and software pricing is not to be asked here... you will be dead before you launch if you take this advice.

Answer 5

Obviously it would make sense to put yourself out there and do extensive research on what other products in your niche are going for and then make yours a little bit cheaper and make a number with a seven in it as those are proven to sell better for whatever reason.