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Set Prices Using Costs, Offer Scope, and Customer Decisions

Summary

Learn to set prices using fixed and variable costs, included scope, achievable sales volume, purchase reasons, and the actual time required for delivery.

Published

Set Prices against Costs, Scope, and Reasons to Buy

Set prices against delivery costs, achievable sales volume, and what customers need. Consider sustainable income alongside affordability.

Copying competitors ignores differences in work and cost. Explain included scope and review purchase and delivery results.

Calculate Fixed and Per-Sale Costs

Fixed costs persist over a period; variable costs increase with each sale. OpenStax includes both in pricing considerations. (OpenStax: Pricing factors)

Calculate the Amount Remaining per Sale

Subtract per-sale variable cost from price, then assess whether achievable sales cover fixed costs.

State Included and Additional Work

State included deliverables, sessions, and period. Explain which changes add fees.

If you offer multiple plans, pair prices with actual differences in work.

Review Price Using Purchase and Delivery Results

Investigate non-purchase reasons and what buyers needed, including timing and task fit.

Record delivery time and sales volume to review price and scope together.

For the related decision, read Calculate the sales volume a discount requires.

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Frequently asked questions

Q: Should prices match competitors?

A: Consider your own costs, scope, and sales volume.

Q: Should fixed costs be considered?

A: Assess revenue covering period costs alongside per-sale costs.

Q: Are multiple plans necessary?

A: Use them when actual needs differ and explain scope.

Q: Should poor sales trigger a price cut?

A: Investigate reasons, communication, costs, and delivery capacity.

Sources

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