Small Biz Life

Small business owners typically struggle with pricing their products, especially digital products. In this episode, we discuss the factors that must be considered when setting your prices. For more information about pricing your services, check out episode 90. The components of pricing There are four components of pricing: Direct materials - These are the materials that go into each unit of your product. This might be the cost of a product that you have someone else manufacture for you or bonus items you give away with the cost of a digital course (maybe you mail a welcome packet or t-shirt). Direct materials can also be the cost of software that is incurred on each sale (if you are selling software as a service or other products with incremental software costs). Direct labor - This is the direct cost of labor to make or provide the product. An example of this would be the cost associated with your labor to record videos for a monthly membership site like Small Biz HQ. This would also be the cost of editors