Pricing a product

Pricing a product means settling on a number that covers what the product costs you to make and still holds up against what the market pays for it. Priscale does that on the product's Adjust Price page, the last step of the product flow, under the heading "Find the correct price for this product." The page takes the numbers you already gathered and turns them into a list of possible prices, marked so you can see at a glance which ones make you money. You still make the call; the page makes sure you make it with your costs in view.

If you want the price ladder itself explained in its own right, The Pricing Spectrum covers how it is built and how to read it, on products and services alike.

Before you can price a product

Adjust Price needs two things before it can build anything:

• At least one task or material on the product, which is what your production cost is calculated from.
• A market value for the product.

If either is missing, the page shows a More information needed notice with a shortcut straight to whichever page fills the gap: Add Tasks / Materials, Set Market Value, or both. See Building a product for the first and Product market value for the second.

Once both are in place, the page builds the price list on its own the first time you open it.

TIP

A product is priced on two numbers only, your production cost and your market value. There is no client budget in the picture, because a product is not quoted to one buyer. That makes your market value the single most important number on this page, so it is worth taking the time over. Determining market value covers how to arrive at it.

Read the pricing spectrum

Everything lives in one card, top to bottom:

• Your key variables, two amount buttons captioned Market Value and Production Cost. The name is the small caption; the button itself shows the amount. They are arranged from the lower amount to the higher, so their left-to-right order depends on your own numbers. Pressing one scrolls the list below straight to that price, so you can see where it falls among the others.
• The price list, the spectrum itself: a scrollable ladder of prices with the highest at the top, running down past your key variables toward zero. Prices cluster closely around your market value and production cost, and spread out in between, so the range you actually care about has the most options in it. The list opens centered on your production cost, or on your chosen price once you have one.

Every price is colored and marked for how it lands against your production cost, and the two named prices carry a warning when your numbers contradict each other. On a product there is one contradiction to watch for, and it shows up on both labeled prices: Production cost is higher than market value, with Market value is lower than production cost as its mirror image. The Pricing Spectrum covers how to read all of it.

TIP

Your production cost is the floor and your market value is the reality check. The useful prices almost always live between them, and how far above your cost you land is a judgment call about your reputation, your competition, and how much of the market you want.

Choose your price

Press a price on the ladder to select it. Two figures appear under the spectrum:

• Selected Price, the number you chose.
• Result, what you make or lose on the product at that price, labeled Profitable, Break Even, or Unprofitable.

If you land below your production cost, the page says so plainly with an Unprofitable Price notice: "This price is below your production cost. You will lose money on this product." Nothing stops you from choosing it, and sometimes there is a good reason to, such as a loss leader that brings people to the rest of your catalog. The notice is there so the decision is a deliberate one.

To use a number that is not on the ladder:

1. Select any price on the ladder, which brings up Selected Price and Result.
2. Press Use Another Price, next to Selected Price.
3. Enter your own figure as the Custom Price.
4. Press Set Price.

Your figure becomes the selected price, joins the spectrum as its own entry, and gets the same profitability treatment as every other price. This is also how you round a chosen price to a number that reads better on a shelf tag or in a catalog.

Choosing your first price is what moves a product out of Draft. From then on it is Planned, and the price shows on the product as its Final Price.

Approve the price

A planned product with a price shows an Approve button under the result. Priscale asks you to confirm, because approving does two things at once:

• It locks the price in. The product becomes Approved, and everything about it goes read-only: its tasks, materials, and market value can no longer be edited, and the product flow offers View Product instead of Adjust Product.
• It logs the price as a market price of your own, marked Paid, carrying the product's tags and pointing back at the product as its source (From product). Prices you actually sold at are the strongest evidence you have of what the market pays, and this one now sits alongside your competitor research on the Market Prices page, ready to be picked as the market value of the next product like it.

Changing your mind is allowed. Adjust Price stays usable on an approved product, and choosing a different price there sends the product back to Planned: the Approved badge is replaced by the Approve button again, and the price logged from the earlier approval stops counting as paid. It stays on your Market Prices list as a record of what happened, since prices that came from a product cannot be deleted.

WARNING

Approving is the point where the product stops being editable, so do your last pass over its tasks, materials, and market value before you press it. Reopening the product means re-pricing it, which un-approves the price you had logged.

When your burn rate changes

Your production cost adds up your tasks and your materials. The task side is charged at the burn rate the product was carrying when you built it, and that rate is a snapshot: it does not follow your organization's burn rate around on its own, so a product you priced months ago may still be costed at a rate you no longer run on.

When the two no longer match, an Update Burn Rate button appears with the other actions at the top of the page. Priscale asks you to confirm, recalculates every task's cost and the product's production cost at your current rate, and drops you back on Adjust Product so you can review the new numbers.

Two things to watch after an update:

• The spectrum is rebuilt around the new production cost, so the prices on the ladder shift.
• Your selected price does not move. Come back to Adjust Price and check the Result, since a price that was comfortably profitable at the old rate may be thinner at the new one.

WARNING

An out-of-date burn rate makes every price on this page look better than it is. If your expenses, payroll, or available hours have changed, update your Burn Rate first, then update the product, then price it. An approved product cannot be updated this way at all, which is one more reason to get the rate right before you approve.

Related pages

• The Pricing Spectrum explains the price ladder itself, on products and services alike.
• Managing products covers the wider product flow this page sits at the end of, and what each status means.
• Product market value covers setting the number the whole spectrum is anchored to.
• Determining market value helps you arrive at that number in the first place.