Your price can be “competitive” and still be too low. A lot of small businesses set prices by loo...Your price can be “competitive” and still be too low. A lot of small businesses set prices by loo...
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Hân Phạm
• Aug 20
Your price can be “competitive” and still be too low.
A lot of small businesses set prices by looking at what competitors charge.
It feels logical:
“Everyone charges around $100, so I’ll charge $95.”
But there’s a problem.
Your competitor’s price tells you what they charge — not whether that price works for your business.
Before setting a price, I’d look at at least 5 things:
1. Direct costs
What does it actually cost you to deliver the product or service?
2. Overhead
Software, rent, admin, marketing, equipment, payment fees, and all the “small” costs that don't disappear just because you made a sale.
3. Time
If a $100 service takes you 5 hours, that's very different from one that takes 1 hour.
4. Desired margin
Revenue isn't the goal.
You need enough margin to cover the business, absorb unexpected costs, and actually create profit.
5. Capacity
This one gets overlooked.
If you can only serve 10 clients per month, pricing too low may force you to chase volume that your business physically can't handle.
Here's a simple question to ask:
“If I sell 20 more of this next month, will my business actually be better off?”
If the answer isn't obvious, your pricing probably deserves another look.
Competitive pricing is useful.
But sustainable pricing is better.
Your price should work for your customer and for the economics of your business.
💬 When setting prices, what do you usually look at first: competitors, costs, customer value, or profit margin?
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