I was pondering the question of when product pricing becomes price gouging while performing some competitive intelligence. I was looking at what the competition charges for similar services that we provide here, and also looking at their page designs etc. to see if there was something worth copying, or shall I say “emulating.”

I’m always surprised at what some of the competition charges for services.

I know how much work it takes to setup a WordPress website and do some of the other related work. Seeing an offer to setup a WordPress site for “only $940″ and a secondary offer that says “you might also be interested in these other services for $250 each” makes my eyes pop out of my head.

I also saw pricing for an “all inclusive” package at $1900 + monthly service fees of “only $150.” I’m not quite sure that I understood what they meant by “all inclusive” since all the items they listed for the package seemed essential rather than optional to me.

For Search Engine Optimization (SEO) work, I saw a company charging up to $3000 a month and requiring a 6 month commitment in order to get that “discount pricing.”

Seeing pricing like that makes me worry that I’m undercharging, and it also makes me worry that I’m robbing myself by not charging “the market price.”

Here’s the thing, these were not large multinational advertising and PR outfits charging that kind of money. They were all small, boutique firms.

Maybe it’s just something silly that we just need to get over, but those fees seem high, specially given the amount of work involved with setting up WordPress websites. I’m pretty sure I’d feel differently if this website were my primary source of income and I needed to make sure that I could make payroll come Friday, but right now it’s not and I don’t.

I do believe that we need to change our product mix around and focus more on multimedia production, video production, video distribution and related services since that’s what the market is asking us for, but our pricing for videos is even further below the market rate. Our quality is still top notch, it’s just our pricing that is low. To use a really bad analogy, we’re closer to being a Target than we are to being a Wal-Mart when it comes to video work.

I know you should charge as much as the market will bear, and with an online market place, the market can bear quite a bit from what I’ve seen. Our market though, are small businesses and entities so I feel our pricing needs to be in accordance with what our market can bear. Don’t get me wrong $18,000 from 1 client would be great, but in our market space not many clients can afford that.

What do you think?

When are you gouging and when are you just charging the market rate because that’s what the market will bear?

On a different note, you should probably hire us to do some work for you before our prices go up.

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