Should I price my product low?

I know the advice is always to “charge more”, but I don’t think my product is good enough yet, plus I think there’s 10x more people who can afford /mo instead of /mo. When is it OK to charge less instead of more?

When considering whether to charge less instead of more for your product, it’s essential to consider the nature of your market, your business model, and your long-term goals. Generally, charging more is advisable because it can help ensure sustainability, but there are valid scenarios for charging less.

Large Audience, Small Price: If you believe your product appeals to a vast audience willing to pay a lower price, that can work if you can keep costs low and acquisition efficient. For example, indie startups with consumer-oriented products might need to target 10 million potential customers if they’re charging around $10/month or less, as the volume is necessary for sustainability this article illustrates.

Low Operational Costs: If your product or service costs little to operate—nearly free customer service, minimal infrastructure, or easy scalability—it supports a low-price strategy. You may use this pricing to offer a simple product to a broad market, often where existing options are poor and costly. However, expect to need more customers than a higher-priced offering would require more details can be found here.

Niche Markets: Another approach is targeting a niche market with a high volume of small transactions, as the cumulative effect can be significant. This strategy can also work if you remain a small, lean operation and don’t require substantial revenue to sustain personal goals rather than ambitious growth—especially if you’re replacing a salary on your terms explained in this article.

Strategic Positioning and Value Proposition: Ensure that even if the pricing is low, your positioning and the perceived value do not come off as “cheap.” Successful branding and clear articulation of value, like emphasizing growth over cost-saving to appeal to business metrics that your audience values highly, might help justify a higher tier in between detailed here.

In summary, charging less may be an effective strategy when you operate in a large market and keep operational costs minimal, target a niche that justifies this approach, or strategically position your lower-priced offering to maintain perceived value. Whether choosing higher or lower pricing, remember that it ties into your overall business model and needs to be reflected in product design and go-to-market strategy as highlighted in this article on pricing structures.

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