Hello!
It's me again, long time no post cause I've been busy building my business.
One thing consistently worries me. Although I think the only way to definitively get my answer is to launch and see how the market will react, I'd like to see what you guys think first.
I'm having pricing issues. I know that to compete on pricing for my product (premium loose leaf tea: which is arguably a commodity, although it has a luxury product image in North America) is impossible as there are some pretty big players in the market.
However, I've researched my direct competitors (small businesses selling pretty much the same type of service: a monthly subscription for a mystery of different varieties of tea) and came up with some troubling pricing issues.
We're going to be selling our subscription at a $50/2-month price point. One company is charging $25/m but lowers their pricing the more you pre-buy down to $20/month if you buy 6-months in advance.
Another competitor is selling theirs at $15/month, but admittedly at 1/3rd of our amount of tea. I have NO idea how this competitor is making ANY money as their margins must be razor thin since shipping in Canada is ridiculous.
The question here is: is there any use in worrying about the price point at this time or should I just say "F*ck it" and go with my price? The reason my price SEEMS higher is the larger value because you're paying once every 2 months and also because I believe in the quality and value of my product. However, I'm pretty sure they all believe in their product too!
Thoughts? Advice? Criticism?
All welcome!
-ALSL
It's me again, long time no post cause I've been busy building my business.
One thing consistently worries me. Although I think the only way to definitively get my answer is to launch and see how the market will react, I'd like to see what you guys think first.
I'm having pricing issues. I know that to compete on pricing for my product (premium loose leaf tea: which is arguably a commodity, although it has a luxury product image in North America) is impossible as there are some pretty big players in the market.
However, I've researched my direct competitors (small businesses selling pretty much the same type of service: a monthly subscription for a mystery of different varieties of tea) and came up with some troubling pricing issues.
We're going to be selling our subscription at a $50/2-month price point. One company is charging $25/m but lowers their pricing the more you pre-buy down to $20/month if you buy 6-months in advance.
Another competitor is selling theirs at $15/month, but admittedly at 1/3rd of our amount of tea. I have NO idea how this competitor is making ANY money as their margins must be razor thin since shipping in Canada is ridiculous.
The question here is: is there any use in worrying about the price point at this time or should I just say "F*ck it" and go with my price? The reason my price SEEMS higher is the larger value because you're paying once every 2 months and also because I believe in the quality and value of my product. However, I'm pretty sure they all believe in their product too!
Thoughts? Advice? Criticism?
All welcome!
-ALSL
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