Pricing a product is a tricky situation. Pricing it too high might not generate enough sales for profit and pricing it too low can devalue your product. The goal is to find the optimal price and to achieve this, there are a lot of factors that need to be considered.

Production cost is the first thing to be considered. Be meticulous about this. How would you know if you have gained or lost in your investment if you do not know your overhead expenses in the first place. Also, count in your personal efforts, time you had invested, and intellectual inputs. 

Analyze your market and determine your target consumers. Ask yourself questions like, “how much is the market willing to spend” and “how great is the demand for such a product?”. The answers to these questions will give you an idea about your market which can help with the pricing of your product. 

Conducting research in your specific market is very helpful. This includes identifying similar products already on the market. Know their prices and determine how well they sell; find out which products sell more and which ones stay on the rack. Size-up the competition and  find out which ones are successful with their products. Compare your creation with theirs and determine if your product offers better service or not. 

Also, make sure to evaluate your product's uniqueness. Products in the same market are usually clones of each other. They may differ on the packaging, but sometimes not at all but the content and substance is just about the same. If your product is more distinct or perceptibly unique, you can price higher than the competition.

However, if your product is similar to others already on the market you have to find a way to market your product that will set your product apart from the rest of the crowd. This will help your product sell faster and for more. Your marketing plan might cost you a bit in the beginning but you should just consider that an additional overhead cost which you can use as a basis for your pricing. 

One of the factors that also needs to be considered is the purpose of the product. Some creations are made partly to create buzz. Professional speakers sometimes create books just to help themselves appear more professional Products can be used as marketing materials for your primary business. If this is the case, the merchandise should be rated accordingly. Set the price low if you want to mass market your service; set it high to generate more prestige. It depends on your overall strategy.

Try to predict the future. The dynamics are broad but generally they are still in line with the laws of supply and demand. Therefore, you must estimate the demand of your product at different points of time. Products may lose appeal in a few months; some may increase in value as time passes by. Also try your best to predict competition's counteractions. In the business world, price wars are common and obviously, this will greatly affect your products marketability.

Pricing can be tricky indeed. It is a gamble but with in-depth competitor and market research, you can get the odds in to your favor.