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Pricing Your Product

When it comes time to release your product, you will have to decide how much money you want to ask for it. This is yet another wonderful opportunity to risk disaster and bring doom down upon yourself. It's easy to screw up, and there's one mistake beginning shareware developers almost always make:

They make their price too low.

Yes. That's right. Not too high. Too low. Pricing your product too low can not only destroy your earnings, but, in fact, can make your product less popular! It's an easy mistake to make. Shareware is, after all, supposed to be cheaper than shrink-wrapped software, and, in general, it is. However, there are several reasons why you shouldn't make it too much cheaper:

You Make Less Money: The lower your price, the more copies you need to sell to make the same amount of money. This means you need to spend more time taking orders, more time processing them, and lose more money to credit card fees. This would be all right if lower prices resulted in much greater sales, but this isn't always the case.

You Damage Your Product's Image: It is an interesting phenomenon of marketing that people often see price as a reflection of quality. Often, to differentiate a product, the seller will raise the price. Customers often then see the higher price as reflecting a higher quality, especially if the packaging and appearance contributes to the image (black, shiny, etc).

In the same way, if your product has a very low price, it can make people think of it as being worse. There are thousands of cheap, lousy software products, both shareware and shrink-wrapped. Go to a software store and you'll see plenty of programs on sale for $10. They are almost all lousy, and people know it. If you make your program dirt cheap, a lot of people will see it as cheap. Some people will be attracted by the low price, of course, but not enough to give you the lift in sales you need to make up for your lower profits.

Your Product Is Worth Paying More: Well, at least I hope so. If your product is truly only worth $5 or $10, please don't release it. There are already too many lousy, cheap shareware products out there.

If your program is any good at all, it should be worth a bare minimum of $15, probably more. Don't play mind games on yourself. Don't convince yourself that your product isn't worth it. One of the most common mistakes amateurs make (in all fields) is undervaluing their time. If you're a good programmer, making a good product, your time is worth at least $20 an hour, probably much more. Act like it. Charge accordingly. If your product is genuinely good, that's what you deserve.

So what should I charge?

So how do you find out how much to charge? Do market research. Find out how much people charge for competing products. Don't just look at shrink-wrapped software which will be competing with you, but at shareware as well.

It's often a good idea to charge half to two-thirds of what software stores ask for similar products. This assumes, of course, that your program is of similar quality and with similar features. If your program is much better, charge more. If your program is a lite version, charge less. Don't be afraid to set your price a little high. If it doesn't fly, you can always lower the price later.

There is a lot of dumping going on in the software market right now. Software stores have piles of programs on sale for $10 or less. Game companies have started to give their own games away for free (or nearly free) to help market the new ones. Don't let this intimidate you! Don't be scared into charging a pittance for your products. Charge what you're worth. Charge what it takes to earn the money for your product that you deserve.

It's easy to be scared by the lowball prices of other software companies. I write fantasy role-playing games. Right now, I can name five classic, similar games which are easy to find completely for free. Yet, despite this competition, my $25-$35 games still sell very well. Why? Simple. My games are more fun, and $25-$35 is a fair price for the enjoyment they provide. I figured out what I needed to charge to make a living and how much my games were worth, and priced them accordingly. Many people don't pay, of course, but enough do to make writing the games worth my while.

Strive to develop the ability to honestly appraise what your product is worth, and ask for it. Don't forget - it's your sweat, blood, and time in that product. You deserve to be compensated for it. Be brave. And, should you charge too much, admit your mistake, and ask less. In pricing, as in all else, courage and common sense should be the rules of the day.

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