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The Do’s and Don’ts of Pricing Your Product
Chris Arndt

Do lower costs to lower prices, but do not forget to overlook value. From freemium to premium, you have to decide what’s right for your company and its product and what fits industry standards. But, there are a few things that are universal no matter which pricing scheme you choose. Read this article, before you launch.

Ready to Launch?

Before your hit the market, here are some do’s and don’ts of pricing your product! For starters, there are a ton of pricing models you could choose from as Intuit Quick Books lay out in this post. From freemium to premium, you have to decide what is right for your company and its product and what fits industry standards. But there are a few things that are universal, no matter which pricing scheme you choose:


  •  Make Sure Your Price Covers All Costs
    This may seem like a “duh” statement, but all too often, we see clients that do not account for all costs when determining the appropriate price for their product. Think about staffing, marketing and overhead, not just material costs. Know the appropriate markup to meet your profit margin goal.
  • Lower Costs to Lower Prices
    Remember that the best way to offer lower prices is by lowering your costs. As you become a more efficient machine, you can look to lower your prices, if that seems appropriate for your market.
  • Consider Raising Your Prices
    We cover it in this blog post, but sometimes it is absolutely appropriate to raise your prices. Read more to know when it may be a good time to consider this.
  • Perform Market Research
    Do you have a 500 percent profit margin when most of your industry peers are offering 300 percent? This is crucial research to do ahead of time and to review periodically to ensure you are competitive in your market. Do not forget to also review prices when there is any inflation or recession in the economy or if you are entering a new market.


  • Ignore Your Cash Flow
    Your necessary optimal cash flow should be paramount in determining what your price point will be, because, as we know, your free cash flow is the number one metric to impress investors.
  • Forget to Review Your Prices Periodically
    Make sure you are meeting your financial goals. Occasionally, it may be time for a price increase. If you have a surplus of inventory, then maybe it is time to offer a sale. Do market research again. Some questions to consider.

o What are your competitors offering?
o How often do your competitors offer sales?
o Has the demand for your product increased or decreased?
o Are your customers making money from your product?
o Have your target demographics altered in any way?
o Does it make a difference what pricing model you choose?

  • Overlook Value
    If your product is comparable to your industry peers, then it makes sense to price your product similarly. But maybe your product offers more value than the competition. If that is the case, your price should reflect that. Have you recently reviewed your market and are about to raise your prices? Our post, Don’t Apologize for Raising Your Prices, can help lead the way.

For more information, contact Chris Arndt at, or call him at 312.670.7444. Visit to learn more about our Cloud Services Group.


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