FBC – 325 – REVEALED: How much should you charge for your product or …

How much should you charge for your product?

Today, you will finally get the answer to one of the most burning questions when it comes to business. How much can I charge people for my product or service. There are different approaches, and different answers depending on who you ask.

However, there is only ONE element that matters and we are going to explore it in this episode.

All the details and more inside.

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I had a question from one of my subscribers about pricing. So that person wanted to know if their price was high enough, low enough, perfect or anything. So let me tell you something about pricing.

Generally what people do is look at what other people are pricing, you know, who's the lowest, who's the highest, and then you will put yourself somewhere in the middle. I said this is what a lot of people do. I've done that as well when I didn't know the first thing about pricing.

So one thing you have to understand is that there is no competitive advantage of being the second cheapest. There is zero competitive advantage. So what does that mean?

It means that if you're the second cheapest, obviously people are going to go to the cheapest. If you manage to actually get like Crumbs of the sale the cheapest deal is getting, then you don't make that much money because you are so cheap that your margins or whatever are very, very low. OK, so that's the first thing.

Second thing is when you're the cheapest, you will attract the worst kind of clients. People who are looking for the cheap stuff and there are going to be a pain in support. They're going to moan about everything. All right. Whereas if your prices are higher, you might attract better quality clients.

And also, the danger with being the cheapest is that there is always someone who's going to try to be cheaper. And then it's a battle of prices. You go down, they will go down and in the end, Jesus Christ, you make zero money. All right, so that's one thing about pricing your stuff low.

OK, so people don't think about being the most expensive. Because, you know, it's scary, it's like, oh, man, that's too expensive and stuff, and so this is what I wanted to tell you today and I will give you three examples of pricing so that it will explain what actually matters for pricing.

So what matters for pricing is not necessarily the value of the actual item itself, but the perceived value. If you want to price something very high, there needs to be coherence between the perceived value and the value that the product actually brings.

OK, so let me explain what the perceived value is. So the perceived value is the value of the product in the mind of your clients. So let's say, for example, you have this tyre and the tyre, you can't pierce a hole in the tyre in question or it never deflates or whatever.

It might cost you, I don't know a hundred bucks to produce, but in the eyes of a client, the value is high. So the client is camping and he's on the road all the freaking time, then for him it's worth a ton of money.

They're like, dude, this is worth a lot. And they’re ready to pay six hundred, seven hundred bucks for that tyre because, you know, the perceived value for them is high. OK, so that's the perceived value.

Then you have the actual value. The actual value and the value that people are going to get out of it is something different. So if you read this book about Penguins, you will know everything about penguins. You'll be able to save the planet. That’s a ton of value, but since the perceived value is low, people are not ready to pay that much for just a book.

If you want to sell something for a ridiculously high price then it's not just the perceived value that matters, right. The perceived value has to be there, but the actual value that they get out of it needs to be in sync with this. And this is when you can sell your super expensive products.

How much should you charge for your product?

But expensive is a very subjective concept. And that brings me to my point. So let me give you a good example. So let's say I'm in the supermarket and I am thirsty and there is a bottle of water that I can buy. So there is one at 10 cents. There is one at 40 cents.

It's water. It's the same thing. So I might actually invest if I'm on a date or something like that. Maybe you want some water and I get the 40 cents bottle. Right. I don't know, maybe they're puppies or something on the bottle. Who knows? But I will get that.

So now my buddy is on a date with this girl, and they go to the beach. So they leave the supermarket, they go to the beach. And they have too much to walk like five miles before they get to the beach. So they get there, you know, they put the towel on the sand. Everything's cool. You know, they drink the water and stuff. They are thirsty because the water is well, it's finished. All right.

So now here's the thing. The store is five kilometres away. They both say, well we're thirsty. Are we going to walk 10 kilometres to go and buy another bottle of water? Well, maybe not. Right.

So there comes this dude with a bottle of water. And he says, well, its ten bucks. You want it. All right. So at that point, what do you do? Are you going to walk 10 kilometres to save those ten bucks or are you going to buy that water right then and there?

I might actually buy the water. There is no reason and no justification for me to walk 10 kilometres. It’s going to take me two hours to go and get the bottle when I can get it right here from this dude.

OK, so remember that we both agreed that a bottle of water cost between ten cents and forty cents, but all of a sudden we're going to pay ten bucks for it.

Let's say now that you are stranded in the desert, you are thirsty, you haven’t drunk anything for the last, what is it, five days now? How long can you survive without drinking? I think its seven days. Then someone shows up with a bottle of water. How much money are you ready to give that person for that bottle of water? You will be ready to give them everything you have!

Even though we established in the beginning that this bottle of water was ten cents or forty cents, and all of a sudden now I'm ready to give them two hundred thousand dollars, for example, to buy the water.

So my point is that your price is not something I can tell you. Here is the price, OK? The price is based on this factor. How much do people need that? All right, so if people need this, if this thing is vital for them, then you can charge more.

All right. So this is the main element of how you need to adjust your price. You need to figure out, you know the value that it has for people and how much they need it.

The One Thing That Should Decide Your Price

You are probably pricing out of fear, and it shows. I did it too. I looked at what everyone else charged, shaved a little off to feel safe, and quietly told the market my work was worth less than it was. Cheap did not win me customers. It won me the wrong ones, the ones who value nothing and complain about everything.

The truth I wish someone had said sooner is that price is not a reflection of your cost. It is a reflection of the value you create for the buyer. When I finally priced against the outcome I delivered instead of the hours I put in, everything changed, including who showed up. The startup guides at Stripe Atlas make the same case, that pricing is a positioning decision long before it is a math problem.

So test upward, not downward. The pricing research summarized by Harvard Business Review shows that raising price often raises perceived quality rather than killing demand, which matches exactly what happened to me. I unpack the full mindset shift on my podcast, and the story of how underpricing nearly sank my first business is on my story page. Charge for the value. Let the bargain hunters go elsewhere.

Frequently Asked Questions

What is the single element that actually matters when pricing a product?

Perceived value to the buyer. Martin Ebongue argues that all the comparison games like cheapest, mid-range, or premium miss the point. The only question that matters is whether the buyer believes your offer is worth more than the price tag. Everything else is noise that distracts from that core test.

Why is there no competitive advantage to being the second-cheapest in your market?

Because price-sensitive buyers always pick the cheapest option. Martin explains that being slightly above the lowest price gives you none of the discount appeal and none of the premium positioning. You inherit the worst of both worlds: low margins and zero brand differentiation in the buyer's mind.

Should you copy competitor pricing when launching a new product?

Not as a default. Martin warns that copying competitor pricing assumes their numbers are correct, which is rarely true. Most new founders should test their price against perceived value with real buyers, then adjust based on conversion data rather than what other companies in the niche happen to charge.

How should beginners set their first price without losing customers?

Start by mapping the result your offer delivers, then price as a fraction of that result. Martin recommends pricing high enough to fund quality delivery and support, since underpricing usually leads to overworked founders and disappointed customers. The right first price is closer to bold than to cautious.

About the Author

Martin Ebongue is the founder of martinebongue.com, an online business and lifestyle design blog focused on helping aspiring entrepreneurs build location-independent businesses. Since 2014, he has been creating and scaling online ventures across multiple niches, from digital products and affiliate marketing to SaaS and content platforms, while traveling the world. He shares the real-world strategies, tools, and systems that work, with a particular focus on AI-powered automation for solopreneurs. Follow him on YouTube, X (Twitter), and Instagram.

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