I always meet entrepreneurs who think that starting a business based solely on selling a product or service at the lowest price will get them somewhere. I always tell them that it will be a complete nightmare, and they will regret every second of it.
Think about this: Who are you competing against if you’re racing to the bottom with prices? That’s right, the BIG guys – Walmart and Amazon to name a few, and they are both billion dollar businesses. So, unless you have a billion dollars backing you, why compete against those guys? Your profit margins will be slim, meaning you won’t put much in your pockets.
So, now I ask you: With the money you currently have, would you open a store that competes with Walmart, or would you open a niche store/boutique that sells expensive items to people that have money?
Marketing a product or service is all about presentation. There are countless cases where a company couldn’t sell any products at a low price, but as soon as they doubled, tripled or quadrupled the price, they started selling like hot cakes.
The same goes for a service. I mean, come on, think about what your time is worth! What do you value yourself at? If you value yourself at 10 bucks an hour, that’s what other people will value you at as well. Up your value, and you will make more money and get more clients with money.
When I first started out many years ago, I did the same mistake I just talked about. I valued myself at a very low price, thinking that it would make me lots of money. Instead, I was working 24/7 making almost no money at all, and for some reason, the people paying the least are the whiniest of them all! When I started upping my prices, I got the clients I wanted, I didn’t have to work 24/7, and I made a lot more than I did when I started.
If you want to get paid like a professional, act like a professional, price your services like a professional.
TL;DR Don’t compete on price, find a niche and make people pay for it!