How did you decide on your current pricing? Did you conduct market research to understand what prospects would pay? Or did you compare yourself to your competitors and base your price on that? Or was it a crapshoot, and random shot in the dark? These are the ways most people do it, and they are all wrong. Because the price you set for your products and services is more important than you think.

Let's say you sell a high margin product - information products and software are two good examples. Your price is $60, and your costs are $10 - that means your gross margin (selling price - your costs) is $50 each time you sell one unit. Let's say further that your overhead is $5,000 per month. If you sell 100 units you'll break even, right? Now you want to sell more, and decide you can take some business from a competitor by lowering your price - temporarily. You lower it to $40 - a 33% price cut, and not uncommon.