Dec 15, 2004

Choosing the Price...

Joel on Software has a new piece entitled Camels and Rubber Duckies, which talks about selecting the price of software. Joel presents the entire science behind the price, and then tears it all apart.

He presents some interesting ideas in the discussion. When you say that your software is work a particular value, your customers will immediately compare you to your competition. For example, the UML modeler prices that I previously discussed are an amazing example of this. You have products that start at $100 USD all the way up to $5000 USD, and I completely agree with Joel when he says that choosing a cheaper product sometimes makes you think that you are getting a lesser product. Maybe you are. Maybe you aren't. The real difference is that the organizations that are selling it at $5000 have customers that are willing to purchase it at that price, but obviously students and individuals cannot afford these prices. Unfortunately, you cannot figure out how much people are willing to pay until you get it out there.

Although Joel does not present any real solid information, it is a great read, especially if you are looking at setting the price for something.

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