Pricing and Value

Day 298 Week 43 Q4 Thursday, October 26, 2023

So you have created your masterwork, invention, book, composition, artwork, or one-of-a-kind something. Now the question comes: how much can you charge for it? And how much should you charge for it? Are you the product? Or is the thing you have done the product? All of these things require you to have a business model in mind and to determine what the value of what you have done is.

The value to you and the value to your customer may not be the same. You are the seller, and they are the buyer, which means that someone other than you will ultimately determine the price that is paid.  The value can change dramatically, depending on the context. Selling snow in the winter versus melted snow in summer can have a very different value.

This is where research comes in. You have to find similar offerings and see how much value they have by seeing how much others have paid for them. Do not make the mistake of thinking you have no competition. You always have competition. Perhaps if you become extraordinarily famous and celebrated throughout the world, you will have no competition, but almost no one ever gets there.

Fortunately, we now have the Internet, where research can be conducted far more quickly than in the past. There is also a relationship between what you do and what do you think you can sell something for. And what is the strategic value of selling something? Are you trying to make money from the thing that you have made, or are you trying to use it to position yourself to be engaged to do something else?

Many creative people do not think much about pricing in value until they have completed a number of products and attempted to consummate a number of transactions. If you were to become a sustainable creator, you’re going to have to find out how to price things appropriately. If you charge too little, your reputation will be poor. If you charge too much, no one may be willing to pay for it.

The value of what you are selling may change as your reputation grows or shrinks. Therefore, it is best to investigate the value of others and their works that are most related to who you want to be in what you want to do. Try to imagine the trajectory that you will be taking over a more extended period of time because your value cannot come about instantaneously.

How much value you have depends significantly on who the customer is and what are their means. Can the customer afford to pay what your level of effort would require as fair compensation?

You need to understand how much you have invested in terms of time, money, and other resources in order to determine what you can profitably sell a result for. What are your costs is the very first question you need to answer.