Entrepreneurship

Price it right

By Johnny Fuery ⋅ February 12, 2007 ⋅  Print This Post ⋅ Post a comment

I lost two weeks of revenue on one of my homes near Sacramento this month, because of my own lack of specific market knowledge of the region.

It was a calculated risk — surveying the competition on craigslist briefly led me to the price I set — but if I had simply priced it right the first time I posted an ad, I could have saved myself nearly $800 in revenue.

Ultimately, I lowered the rental rate by ~6% and rented in a day. At the higher rate, I interviewed over half a dozen candidates and answered over 20 inquiries.

It would have taken me 2/3 of a year to make back that lost revenue, and ultimately I had to lower the price anyway. In other words, I just kissed a high-end steak dinner (with wine) for me and 10 of my friends goodbye, and all because I failed to do adequate market research.

There’s a lesson here for anyone selling a product or service — price your widgets to sell. Especially in a commodotized area (like everything from iPods to a mini McMansion in the nearby suburb) where market prices are easily accessible (through craigslist or ebay), there’s no excuse. Spend an hour determining the price range, call on your competition as a customer, and get it right the first time.

Then take a group of people you care about out to a nice dinner and tell them all how grateful you are for having them in your life. Call it “giving back”.