How much would you pay?
Hi all,
I’m trying to figure out a price that makes sense for my product. The product is ready to launch, with the first “beta” batch currently in production. Everything is figured out except for the price.
My product is: getgumball.com
Because it’s a hardware / IoT product, it’s quite expensive to produce, especially for the first batch. Right now it costs me about $120/unit for a batch of 50 units. I’m okay to sell that first batch at production costs without any profit margin, though.
But down the road, if I can get the production cost down to $50, adding a 50% profit margin, the resale price would be around $100 at minimum. This feels fair to me - but obviously, it’s difficult to get an idea of how much people would actually be willing to pay for it. If I ever see that people wouldn't pay more than $50 for example, well, pursuing that business may not even be worth it.
So, I’m doing a quick “Van Westendorp’s Price Sensitivity Meter” experiment. Basically, all I need is for potential users to tell me those 4 prices:
1) Too Expensive
At what price would you consider the product to be so expensive that you would not consider buying it?
2) Too Cheap
At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good?
3) Pricey
At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it?
4) Bargain
At what price would you consider the product to be a bargain — a great buy for the money?
Would you help me by answering those 4 questions above? If you could just reply in this thread with something like this below, that'd be SO helpful.
- Too Expensive: $150
- Too Cheap: $30
- Pricey: $100
- Bargain: $70
Thanks so much!!!!
Of course, any feedback, suggestion, or idea on the product itself would be super welcome too!
Also, Indie Hackers may be the wrong place to ask to be honest. The general theme is we're all basically broke and trying to make money. (No offence to anyone) It's quite common for IH to think something is too expensive while other markets think it's too cheap.
Now I'm broke and also offended!
Beyond being broke, indiehackers is a global community. So $150 is almost half of the minimum wage here. I'd say it's a little bit too expensive :)
Good point.
Too expensive: $75
Too cheap: $5
Pricey: $50
Bargain: $15
I would pay $20-30 for it.
I think it is a nice product ! I may not be your target consumer.
$20-$30 only happening after china has gotten production costs down to $5.
yeah I would be happy around the $20 dollar mark as well
Great, thanks Melinda for sharing! That's really helpful!
Stop asking randoms "how much they'd pay", it misleads you. You're being guided by people who'd never buy your product. Instead, go sell it to potential customers and leave it up to them to call a fair price. After 10 sales you set the price in the middle.
(ps - $49 :D )
"let them call a fair price" - I like this idea, I may actually try that!
Thanks for your thoughts!
Whatever your target market says they would pay, charge 50% more.
There's "would happily pay" and "would unhappily pay."
Another suggestion. Just don't take it personally. The product looks like a police car siren light thing, which is fine, or even a retro vintage vibe is nice. But does not show on its face IoT and showing it could justify a higher price ticket.
So maybe adding some cyber symbolism like <Intel chip inside> or something could help.
It is a gadget, not a painkiller, I think.
Without much thinking, if I were you, I'd go upmarket, stock traders, for example, love flashy:) things and they could pay 150$ just to show off. In the meantime, you should get the production price down, and explore penny pinchers' niches.
Too Expensive: $250
Too Cheap: $15
Pricey: $160
Bargain: $60
Note: I think the price depends on the kind of target audience.
I have filled this with the company I work for in mind, we do not sett a lot of units per day, actually, we "sell" consulting services and projects for several thousand EUR a few times a week. In this setting those gadgets would make a lot of sense/add some fun and if you target B2B rather than B2C you can increase the price quite a bit + increase your chances to sell multiple units at once (we have about 6 different rooms per office, so one siren per room would make sense=6 sales for you at once).
In fact, I will forward this gadget to our head of sales, let's see if he likes it :D
Awesome, thanks for the feedback!
Very much agree about B2B - companies making just a few sales (or alerts) per week is where it's going to get the most value I think too.
About 10 years ago, i worked on a side project at my job. Idea was when someone got an error the red light would turn on with a sound. I used following https://www.delcomproducts.com/products_USBLMP.asp.
Hopefully, it will give an idea on how much you should charge.
Very interesting, thanks for sharing that link! I checked their prices and one light costs $100, so pretty in line with what I originally had in mind!
It could be a fun, impulse-buy type product for $20-$50.
This seems like a novelty item that would be cool to have.
Too Expensive $100
Pricey $75
Bargain $40
Too Cheap $20
I think you would need to produce them in larger batches to get the price down.
Yes, indeed the plan is definitely to produce them in bigger batches, I reduce the costs as much as possible. But it's quite challenging to get an estimate on how big the batch should be, and would that be affordable enough that people can buy them
I have some feedback if I may: it seems to me that it is kind of expensive, a nice-to-have thing (not solving a real problem) and it is targeted to cash strapped individuals (probably indie hackers to make few sales). People who have more sales volume will be absolutely be annoyed by this thing going on all the time and it will basically never stop from making noise.
Agreed. The primary use would be for "new sales" but if that becomes annoying people can just use them for other things like setting up alerts (website down, payment failed, etc).
Lols that’s pretty fun. The cost is a bit out of my price range for gifts though. If you sold if for $50, I might spring for one for myself or a friend as a bargain.
Above $100 brings it out of my splurge spending category, unless I really really want it. At that point, it’s pretty much holiday only. Once a product is above the price of a hotel room, I really have to think about it because I could trade it for an enjoyable day trip instead.
It’s cute though—I’ve seen string lights that are programmed different colors based on, say, a build passing or failing. If you had those for $25, I’d spring for that as a bargain too.
cool, thanks for the feedback!
We used to have this setup for monitoring alerts in various NOC's I worked in over the years. I think $100 may be a stretch price point for some buyers, but if I had a use for it currently, I would pay $100 rather than build it myself, it would be time well spent. Good job! Wishing you luck!
Awesome, that's great to hear! Thanks for the feedback!
This comment was deleted 4 years ago
No worries, thanks for the feedback. Maybe in the future I'll have different models.