How to price the product?

Before working out the selling price, do you exactly know how much your product costs you? This should include costs like that of raw material, transportation, any other utility expenses, rent of your office, the salary of your employees, your income, any other overhead costs, etc. Often it takes a while to truly determine exactly how much it costs you.

It is better to avoid incurring any fixed costs, or investment in the assets unless you are confident that you will be able to recover the investment. This confidence must only be based on your experience of selling to the customer. If you have a strong growing customer base, now you may think of investing in some real assets. Not before. Ask yourself do I have a number based on my experience on which I will amortize my fixed cost? 

Once you have calculated your cost, while not ignoring the govt. taxes, now you know at what selling price you will be able to incur a loss or profit. 

• Look at the competitors or substitute products, to see where you should place your price. 
• Look at how desperately the customer wants a product (not in the sense to exploit a customer’s pain point) 
• Look at the value of the problem you attempt to solve through your product or service, without becoming greedy
• Look at the general buying power of your customer base
• You must also consider that you must not make the customer feel ripped off after buying your product or service
• Use your gut feel. 

You might have to experiment with different price points with different customers to come to an optimum selling price. This must be done before the mass marketing of the product.

If you arrive at a price that is less than your cost, then either you have to cut down your cost or have to find a customer base that can pay for it, or let go of the product or service altogether.

If it’s a similar product to what is already available then working out a cost is not much of a hassle.

The right approach should be to see what the customer can pay and then tweak your proposition to develop an offering. 

Product packaging and presentation also plays a very important role in charging a premium from the customer. But the product quality and customer experience must also be worthy of its packing to ensure repeat sales.