We found a great video from Evan Carmichael we wanted to share with you.

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How to price a product, so I got a great, question for one of my YouTube viewers, Eduardo,love you guys and in order wrote in to, say hi Evan I have a question for you, what happens if you found the product or, service that people need as extremely, valuable but are having a hard time, deciding how much to charge people for, thanks Eduardo so this is a great, question and one that every entrepreneur, has to go through when you’re launching, your product your service and I’m going, to give you three tips a lot of people, will look at pricing based on your cost, right you look at will it cost me $50 to, make it, so I’m going to sell it for $100,and make this margin it’s the wrong way, to look at it because you have to think, about the value first point is value a, customer cares about what value they’re, getting from it if you’re trying to sell, me something I don’t care that it cost, you 50 bucks I may only look at it as a,$40 product and that’s the maximum that, I’m going to be able to spend on it so, your cost doesn’t matter here for your, pricing your price you should look at, the value that you’re adding to your, customer how much value can you bring in, there the more value you’re going to add, the more money you’re going to make the, more you can charge for your product or, service okay business that one of the, most important rules is adding value you, want to make a lot of money quickly you, need to add a lot of value to your, customer quickly so think about how you, can add more value how you can make your, customers lives easier and what that, time savings is worth to them or what, the bonus that they get from using, your product or service is worth to them, then that’s how you figure what you’re, going to charge ok so think about value, added instead of cost based way of, pricing your product okay number two is, your audience you have to understand who, your audience is and what their budget, is and there’re two ways that companies, usually goes either going after low, quantity but high price ticket or big, quantity and low price ticket so you, look at cars okay you have Ferrari you, have Honda they’re both selling cars but, they’re selling to different audience, their audience have different budgets, and so they sell different vehicles to, them and, it’s not just about a different price, point it’s a different car completely, right when you buy a Ferrari versus a, Honda Civic you’re getting a different, car okay it’s not the same car, and they, understand who their audience is and, what their budget is so if you’re, selling to Ferrari those guys are, spending tons of money on it, but they’re, getting still value for their dollars, right they’re they’re buying it because, they feel like they’re still getting, good value and then when you buy a Honda, Civic it’s a completely different, audience but the people buy a Honda, Civic they’re still feeling they’re, getting value for it so you’re pricing, that according the value but, understanding your target audience and, then you build your product or service, to kittu that market so you have to, understand as a company which direction, you’re going to go in do you want to, work with a few clients who are paying, you good money and that’s how you’re, going to grow your business or you want, to hit a ton of people mass-market this, thing and that reflects having a lower, price point for your product or service, number three is stage of business you, have to think about what stage of, business you’re at right now you a pure, startup or duty have a reputation of, being established because there is a, bias against start-up entrepreneurs, because it’s riskier it’s riskier, dealing with startups as a customer it’s, harder to deal with a start-up, entrepreneur than it is a more, established business why you look at so, I don’t know what you’re selling say, you’re selling machines or equipment if, I buy from you I want to make sure that, you’re still around in five years I need, someone who’s going to maintain my stuff, if my machine breaks down I want, something to come and fix it or give me, a replacement if I’m more than your Jif, starting you’re not going to be around, in five years then it makes it riskier, for me to buy from you say you’re, selling a service if you’re a consultant, as an example I want to look at well who, you work with the for what other, companies like me have you helped the, answer is nobody you’re just getting, started,then it’s risky for me right I’m, probably going to say no it’s harder for, me to get to that yes because you don’t, have the track record so matter what, you’re selling there is a bias against, the pure startups because you don’t have, that track record of experience it’s, riskier for me to work with you than, somebody else so typically you’ll find, that there’s a, a price reduction that comes with, startup entrepreneurs so you start by, having a lower price because you need to, get your name out there you need to get, a portfolio and you need to get some, traction some momentum to show that, everything you say works actually works, right so you have a lower price point, and then as you get more experienced as, you get better as you can add more value, and demonstrate that you can increase, your prices a big challenge though for a, lot of entrepreneurs is we stay stuck at, that low pricing too many entrepreneurs, underpriced themselves and what I want, you to do is think about how can you, start increasing your pricing okay, you’re adding a lot of value just not, charging for and test it test working, with a 10% increase and another 10%,increase and see where you’re starting, to get push back from your customers, because a lot of times the customers who, can’t afford to pay that little boost in, revenue those are not your ideal, customers they’re not your best clients, are the ones who give you the, hardest the hardest time they don’t work, for business to you they don’t, appreciate your value and you work to, make them happy, and they’re never happy, and they’re not giving you a lot of, money,every entrepreneur almost can increase, their prices and it will help there, business so test it test and start, working with more ideal clients if, you’re in the brand-new startup stage, you don’t have anything launched yet, then fine, it may even be free just for you to get, some experience and build up a portfolio, and build up a client list get people, giving you testimonials but then start, increasing your prices don’t be afraid, to constantly check and test your, pricing and see where you can increase, it to the point where you’re getting, feedback from your customers saying hey, this is our limit one quick example so, part of what I do is I work with brands, I work with brands who are trying to, reach entrepreneurs or create content, for them help them with our marketing, campaigns the very first one I did they, said Evan we want you to write a 300,word blog post for our site we’ll pay, you 500 bucks to do it you can link back, to your site I’m like I get a link back, from a big site they’re gonna help, promote me, and they’re going to pay me,500 bucks to do it I’m in why not but I, didn’t just do what they asked for, I didn’t just write that 300 word, I wrote 1,500 words and I made a video, and I promoted it and did was more than, anybody else did that they hired and I, slowly started increasing my prices, because I was adding a lot more value so, wasn’t just tracking $500 now it’s,$2,500 you want me to write a blog post, to your site it’s $2,500 that’s what I, charge that’s where I’m getting some, some resistance now from clients that’s, where I’ve gotten to but I’ve increased, my prices five times I’m just talking a, small 10% increase five times increase, in the pricing because I added more, value and it continuously increased it, they went from 500 to 1,000 to 1,500 to,2,000 to 2,500 over the course of about, a year and a half by testing my prices, and I could still be that guy stuck at,500 bucks, where meanwhile could be charging 2,500,dollars and that’s where a lot of you, guys are you’re under pricing your, products so remember it pricing is, important remember to think about, charging based on value the value that, you’re adding think about your, demographic your target audience on the, chicken a for and what their budget is, and think about your stage of business, and if you’re just trying to attract, clients to get started or know if you’re, really trying to grow a big company, start making them serious revenues don’t, be afraid to test your pricing believe, so as you’re watching the video please, give it a thumbs up below let me know what you think leave a comment, underneath asking a question like video, response underneath and if you like more, videos you want to see more like this, click on my face to subscribe to the, channel thank you so much I’ll see you, soon