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We found product pricing to be the hardest part of launching our product. What resources or guides (online or offline) have you found useful in thinking about pricing your product?

I'm interested mainly in shipped software, not subscription or SAAS services.

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7 Answers

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I've just written an eBook ('Don't just roll the dice: a usefully short guide to software pricing') that you might find interesting. You can download it here. It's free.

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Awesome! That's just the sort of thing I was looking for. – DThrasher Oct 20 '09 at 21:42
It's an awesome book. Good job. – the dictator Jan 25 '10 at 23:12
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The #1 error we all make the first time we price our product is too go too cheap. It's amazing how insecure we feel.

If you have direct competition, do not go for significantly cheaper. Dare to charge a comparable price and fight on quality and features (even if it's your version 1.0 or alpha).

Somehow, everytime, we keep making that same mistake. I don't know how to emphasize this enough.

In case of doubt, raise your prices.

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Underpricing is exactly my fear. It's much easier to cut prices than to raise them. – DThrasher Oct 15 '09 at 15:42
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Good point but what about if it's impossible to provide all features in version 1.0? Does it still fair to charge same amount? – the dictator Oct 15 '09 at 17:57
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A nice written by Joel Spolsky on this subject (especially from a programmer point of view) - http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html

Also as a long read I suggest "The Undercover Economist", it's not directly talking about pricing but it's got some good eye opening moments, especially on the subject of relationship between scarcity power and pricing.

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I'd forgotten about the Joel on Software article. Excellent suggestion. I'll have to check out the book, too. – DThrasher Oct 15 '09 at 15:39
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Remember that if your prices are too high you can always use tricks to "lower" it, like offering time-based discounts, affiliate programs, coupons, etc..

Then people feel they're getting a deal -- some will buy because of it -- and others will pay full boat anyway.

I agree with Alain that we tend to under-price (+1 to you my friend), but note that our v1.0 products are full of crap and probably need to be cheaper. As we improve the product and raise the price it works, but some of that might be the better v2 or v3.

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+1 to v1.0 need to be cheaper. – the dictator Oct 15 '09 at 19:10
up vote 1 down vote

One of your best guides will be your competition. If there's no direct competition, then try to place your product on a similar competitive landscape.

You may be able to simplify as well: if they're doing server+user+whatever licensing, perhaps you can do just user. But it should all come in at a similar price point.

Too low, and you'll come across as inferior.

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Eric Sink has a great article on software pricing, and IMHO one of the best guides to startup software marketing/pricing generally.

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I really like Eric Sink's writings about the Business of Software. I'll have to re-read that article! – DThrasher Oct 15 '09 at 15:36
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You might find alot of useful information here: http://www.softwarepricing.com/

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Great link. I'll have to investigate that site a bit more. – DThrasher Oct 15 '09 at 15:37

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