Pricing After Dark

I really like the idea of good, better, best pricing. I think it makes sense, but I don't know how to apply it to my products. How can I use it for T-shirts?

I'm a manager at a small company. My firm's competition has been getting fiercer every year, so we've been forced to start cutting corners on quality just to compete. How do we know when we've reached a price that's low enough so that we can stop trying to cut further?

My company is selling a product that has a defect known to us. Is it ethical to avoid revealing the problem to our customers?

Hi Adam, I'm a web designer and it seems like everyone is telling me to specialize in order to earn higher profits. I decided to specialize in small nonprofits, since I come from that background. But now I'm having more trouble than before. Is there some part of specialization that I'm missing?

I'm starting a service-based business, and I'm having a lot of trouble coming up with productized offerings.

It's not that I don't know what customers want. It's just that I have no idea what to charge. Each job is going to be very different, so I don't know how much I should be asking for each package.

Can you give me some hints?

You always seem to talk about pricing from the seller's point of view. I'm on the other side of the equation. I'm a non-technical manager and will be overseeing an outsourced software development effort (we have no developers on staff).

We're currently talking to two development companies. One is giving us an hourly rate but is unwilling to give us a firm estimate. The other has presented a guaranteed fixed price.

How in the world can I compare the two bids?

My company manufactures and sells industrial molds. Although we're a new company, we are skilled at what we do and produce very good products.

Unfortunately, businesses keep buying our competitors' products that are of lower quality and don't last as long as ours. We're only charging a bit more than them, but given the extreme difference in quality, I don't feel like that should be causing a problem.

What is wrong with the buyers, and why aren't they choosing us instead of our competitors?

I help small businesses with their computer problems. I usually charge by the hour, but I am trying to switch to value pricing. It isn't working. The people I've pitched agree with all of my points when I show how valuable my services are, but they still balk at my proposed rates. Is there some secret step in the value pricing process that I'm missing?

I'm a partner in a local [service business] and we've decided to move closer to the center of the city. This will allow for more interaction with our core customers and reduce commutes for our employees. We've received a low bid for our existing place, and our real estate agent is telling us to take it. Should we?

I keep hearing that costs don't matter when setting prices, but is that really true? Why would anyone set his prices below his costs?