It’s time to crumble up the “traditional” product pricing strategy and throw it in the trash…
most of it anyways.
When I speak to new inventors I always ask them their new product’s retail price.
They often reply … that depends on the manufacturing cost.
And that my friend is why the “traditional” logic is seriously flawed for inventors.
I’ll explain …
See when you are developing a new product,
the market, has more than likely, predetermined your product price range.
The only logical pricing strategy for new products is competitive analysis.
Determining what your retail price is, based off of your competitor’s retail price.
As a guide … your “better” product typically costs higher than your competitor’s inferior products.
Why this is important…
After you figure out your retail price you can infer your product’s manufacturing cost.
Manufacturing cost is a constraint to engineers – they can design a product to cost a certain price.
We cover this in more detail in Why Knowing Your Profit Matters For Product Development
Do you agree that this makes more sense to ensure profitability? Do you disagree?
Please comment below and let me know!
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