
Ask HN: How do you determine your price point? - quizbiz
Trying to find a good price point for a license and for products. I'm not sure how to go about this. How do I charge one group x amount and another 2x an see which is more profitable?
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aditya
1\. Survey your audience, ask specific questions like, would you pay a) $10-20
b) $30-$40 c) 1 million billion of this product

2\. Check your competition to see what they're charging (counterpoint:
<http://en.wikipedia.org/wiki/Blue_Ocean_Strategy>)

3\. Pick a number (ref: [http://network.businessofsoftware.org/video/dharmesh-
shah-on...](http://network.businessofsoftware.org/video/dharmesh-shah-on-
insights-from) \- worth watching in its entirety)

4\. Play with specials - this week, we're offering a 30% discount to all new
users (better than decreasing the price outright and incurring the wrath of
existing users)

5\. Model the numbers, at all times, how many licenses do you need at x price
point to break even, etc.

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gojomo
Flinch pricing:

<http://venturehacks.com/articles/pricing>

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alavrik
One of the best introductory articles on pricing I've read:
[http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...](http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html)

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stevenjames
In terms of the product(s), what would you pay for it?

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mediaman
That's not always the best metric, particularly when your product is being
sold to an entity which is dissimilar to you (see: rich people, medium to
large companies). In those cases, they are often willing to pay much, much
more than you would.

Many people make the mistake of underpricing because of this.

~~~
patio11
Relatedly, you not selling to HN posters, people on Slashdot, starving college
students, or people who are morally opposed to spending money for software.

I don't mean to step on any toes, but I've heard "$20 is sort of pricey for a
business -- why not make it $10?" enough to be skeptical of the advice on
pricing from other people, unless they are saying Charge More.

~~~
mediaman
Good point. Your business is a good example of one in which you are able to
charge reasonably aggressive prices even to a demographic that is not normally
considered monied.

That people are often willing to pay far more than you'd think is certainly
not limited to enterprises and the wealthy.

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mattmaroon
a/b test it if you have decent traffic. You have to make sure you get a
statistically significant sample.

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nkohari
IANAL, but you're in dangerous legal territory if you charge two groups of
people different amounts for the same product. Either make it a different
license offering, or make sure you're not discriminating against either group.
:)

You really can't figure out a price point in a scientific way (sample and
control)... you just have to adjust it organically and see.

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ryanwaggoner
I love how you state that you're not a lawyer then present definitive legal
advice.

How is charging different amounts to different people "dangerous legal
territory"? Companies do this all the time...think about all the transactions
where the price is haggled back and forth, or companies offering a special
discount to startups or nonprofits, or offering specials on certain days of
the week, etc.

Unless you're segmenting your groups by some protected status, like gender or
religion, I don't see how it's a legal matter at all. But mostly I'd like to
hear why you know that it is.

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dctoedt
I think he's referring to the Robinson-Patman Act -
<http://en.wikipedia.org/wiki/Robinson-Patman_Act>.

