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Setting your Prices Made Easy

Deciding where to set your prices is a tricky issue so what factors do you need to take into account when setting prices?

  • What prices are your competitors charging? If low, are their costs lower? If high, what, if any, additional value are they providing to justify their pricing?

  • Your level of costs/business infrastructure. Do you have high business overheads or extravagant tastes? Do you have a fancy office or work from home? You need to know your overheads, drawings and break-even point.

  • Are you a new or an established business? Despite the difficulty in increasing prices later it's a common strategy to gain market share quicker by undercutting the competition. On the other hand if you're established or reputable you can charge more. 

  • Your value proposition - where are you positioning your business in terms of adding value? At the $2 Shop end or on the luxury side? For more on this see "Adding Value Made Easy" on http://empoweryourbusiness.co.nz but in a nutshell customers don't choose a supplier by price alone, they consider a range of other factors like service, reputation or location.

If you'd like to learn more about pricing I have some useful pricing calculators and checklists.

If you have any tax or business queries of any kind telephone 0800 ASK NICK, e-mail me at nick@abac.co.nz. The information in this article is of a general nature and should not be relied upon as a substitute for specific advice. 


Disclaimer
Important: This is not advice. Readers should not act solely on the basis of the material contained in this fact sheet which consists of general comments only and do not constitute or convey advice per se. Changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. We believe the contents to be true and accurate as at the date of writing but can give no assurances or warranty regarding the accuracy, currency or applicability of any of the contents.

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