Yoda, how do
I price what
I sell?
How to Price what you Sell?
Alok Rodinhood Kejriwal
Founder – 2win group &
therodinhoods
Why?
Why this PPT?
I‟ve sold crazy s*** in the past 29 years. From
infant socks to oil drums to LC (letter of credit)
disc...
Wrong is the
Question you
Ask…
The wrong question!
After deep reflection, I have realized that the
Question itself is WRONG.
Yup. Pricing doesn‟t matter....
Exercise 1

Carefully study the next chart and THINK of
products and services (not related) that fit in
the (?) Boxes
Innovative

?

?
High $$$

Low $

?

?
Ordinary
Need a nudge?
If you didn‟t understand the chart, try this:
- The Top Right Box (green) represents something
that is High ...
Now think of products and services that fit
the chart.
Once done, go the next slide where I reveal
my choices.
Innovative

Post-it
Notes
(3M)

iPhone

Low $

High $$$

Nothing

Everything

Ordinary
Exercise 2

Volume vs. Price
High Volume

?

?

Low $

High $$$

?

?
Low Volume
High Volume

Lays
Chips

Rare or
Nothing

Low $

High $$$

Anything

RollsRoyce

Low Volume
Exercise 3

Losses, Profits & Volume
High Volume

?

?

Profits

Losses

?

?
Low Volume
High Volume

e-Com
Companies

Coke

Profits

Losses
Services
firms

Failed
Startups

Low Volume
Exercise 4

Impulsive vs. Informed Buys
High Volume

?

?

Informed

Impulsive

?

?
Low Volume
High Volume

Grocery

iTunes

Informed

Impulsive
Luxury
Goods

Airport
Shopping

Low Volume
Exercise 5

Volume vs. Competitors
High Volume

?

?

Low
competition

High
Competition

?

?
Low Volume
High Volume

Google
Search

Mobile
Apps

Low
competition

High
Competition
Pet
Shops

Bridal
Services

Low Volume
Relief!

No more charts 
(feel free to create your own exercises using
more parameters)
Question

What did you learn?
Analysis

Let‟s examine the charts once again,
grouped together:
Free to Unaffordable
with Zero/Little Competition
Free

Low Price

High Price

Unaffordable

Google

Post-it notes

iPhone...
Irrational to High Price
with Massive Competition
Irrational
(Free) Price

Low Price

Medium
Price

Flipkart

Grocery

Ser...
Now ask yourself, which of these
Companies would YOU rather be?
Conclusion 1:
Pricing doesn‟t matter  when

You sell
INNOVATION

You sell
PERFECTION

You sell
LEADERSHIP

Google or
Appl...
Conclusion 2:
Pricing does matter  when:

You sell what
OTHERS sell

You sell only
to COMPETE

You sell ONLY
for VOLUME

...
Meta Conclusion:
Stay on the left. Price IS immaterial.
High Price, High Volume
Bose

iPhone

Low

Competition
High

Brida...
What’s with the guys on the left
who DON’T care about Price?!

Google

Apple
Rolls-Royce
Cartier

• Unbeatable
technology
...
What’s with the guys on the right
who only care about price?
• Me-too, competing on price
• Marketing via personal
contact...
Conclusion:
• FREEDOM from pricing comes from Innovation,
Perfection, Technology and Creating IP; NOT from clever
Costing,...
How to Price?
Don’t think of cost &
margins. Instead think of
HOW you will be unique
in your offering
Constantly create IP...
Disclosures:
• The principles and guidelines spoken about in this
presentation are strictly my own ideas and MAY NOT be
fe...
Liked this presentation?
Go through some more!
• Basic Funding Concepts for Entrepreneurs
• How to write effective e-mail ...
Connect with me!
e-mail - alok@rodinhood.com
Facebook facebook.com/rodinhood
Twitter - @rodinhood
My social network for an...
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How to Price what you Sell?

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A guideline and reference for struggling entrepreneurs on how to price products/services that they sell!

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How to Price what you Sell?

  1. 1. Yoda, how do I price what I sell?
  2. 2. How to Price what you Sell? Alok Rodinhood Kejriwal Founder – 2win group & therodinhoods
  3. 3. Why? Why this PPT? I‟ve sold crazy s*** in the past 29 years. From infant socks to oil drums to LC (letter of credit) discounts to advergames to virtual cars in mobile games. In the process, I‟ve always been confronted with the question “How do I price this?!” I‟ve also come across zillions of newly minted entrepreneurs struggling with this tough question.
  4. 4. Wrong is the Question you Ask…
  5. 5. The wrong question! After deep reflection, I have realized that the Question itself is WRONG. Yup. Pricing doesn‟t matter. It‟s a „side effect‟, an „occurrence‟, a „consequence‟. In the next few slides, I shall explain why…
  6. 6. Exercise 1 Carefully study the next chart and THINK of products and services (not related) that fit in the (?) Boxes
  7. 7. Innovative ? ? High $$$ Low $ ? ? Ordinary
  8. 8. Need a nudge? If you didn‟t understand the chart, try this: - The Top Right Box (green) represents something that is High in $$$ (price) and Innovative - The Bottom Right Box (blue) represents something that is High in $$$ (price) and Ordinary - The Top Left Box (pink) represents something that is Low in $ (price) and Innovative - The Bottom Left Box (purple) represents something that is Low in $ and Ordinary
  9. 9. Now think of products and services that fit the chart. Once done, go the next slide where I reveal my choices.
  10. 10. Innovative Post-it Notes (3M) iPhone Low $ High $$$ Nothing Everything Ordinary
  11. 11. Exercise 2 Volume vs. Price
  12. 12. High Volume ? ? Low $ High $$$ ? ? Low Volume
  13. 13. High Volume Lays Chips Rare or Nothing Low $ High $$$ Anything RollsRoyce Low Volume
  14. 14. Exercise 3 Losses, Profits & Volume
  15. 15. High Volume ? ? Profits Losses ? ? Low Volume
  16. 16. High Volume e-Com Companies Coke Profits Losses Services firms Failed Startups Low Volume
  17. 17. Exercise 4 Impulsive vs. Informed Buys
  18. 18. High Volume ? ? Informed Impulsive ? ? Low Volume
  19. 19. High Volume Grocery iTunes Informed Impulsive Luxury Goods Airport Shopping Low Volume
  20. 20. Exercise 5 Volume vs. Competitors
  21. 21. High Volume ? ? Low competition High Competition ? ? Low Volume
  22. 22. High Volume Google Search Mobile Apps Low competition High Competition Pet Shops Bridal Services Low Volume
  23. 23. Relief! No more charts  (feel free to create your own exercises using more parameters)
  24. 24. Question What did you learn?
  25. 25. Analysis Let‟s examine the charts once again, grouped together:
  26. 26. Free to Unaffordable with Zero/Little Competition Free Low Price High Price Unaffordable Google Post-it notes iPhone Rolls-Royce No /Little Competition No /Little Competition No /Little Competition No /Little Competition
  27. 27. Irrational to High Price with Massive Competition Irrational (Free) Price Low Price Medium Price Flipkart Grocery Services: Firms like ad agencies/Hiring firms Lots of Competition Lots of Competition Lots of Competition High Luxury Goods (Watches) Lots of Competition
  28. 28. Now ask yourself, which of these Companies would YOU rather be?
  29. 29. Conclusion 1: Pricing doesn‟t matter  when You sell INNOVATION You sell PERFECTION You sell LEADERSHIP Google or Apple Rolls-Royce Post-it Notes/Amazon AWS Pricing DOESN’T matter Pricing DOESN’T matter Pricing DOESN’T matter
  30. 30. Conclusion 2: Pricing does matter  when: You sell what OTHERS sell You sell only to COMPETE You sell ONLY for VOLUME Services businesses Taxi services Grocery type stuff Pricing DOES matter Pricing DOES matter Pricing DOES matter
  31. 31. Meta Conclusion: Stay on the left. Price IS immaterial. High Price, High Volume Bose iPhone Low Competition High Bridal Services General Services Low Price, Low Volume High Price, Low Volume RollsRoyce Cartier Luxury Goods Zero Price, High Volume FB Google Competition Low Coke Lays iTunes Post-its High Duty Free Low Price, High Volume Mobile Apps Competition Low North Korea High Super famous paintings High Price, Zero Volume
  32. 32. What’s with the guys on the left who DON’T care about Price?! Google Apple Rolls-Royce Cartier • Unbeatable technology • Patents, IP • Perfection of product • Brand recognition (built over years)
  33. 33. What’s with the guys on the right who only care about price? • Me-too, competing on price • Marketing via personal contacts • Very people-dependent • Competing for small volumes • No guarantee of sustainability or profits Services Firms (ad agencies, recruitment services, etc.) Niche service providers (e.g. Bridal services)
  34. 34. Conclusion: • FREEDOM from pricing comes from Innovation, Perfection, Technology and Creating IP; NOT from clever Costing, cut throat Competition or gushing Volumes. • Service firms (e.g. Infosys, TCS, Wipro) have built Pricing POWER by mimicking great product companies. • Pricing is NOT about Cost + Profits. It’s about Delight + Uniqueness.
  35. 35. How to Price? Don’t think of cost & margins. Instead think of HOW you will be unique in your offering Constantly create IP. That will make you develop PRICING POWER Introduce INNOVATION, IRRESPECTIVE of whether you price it or not!! Keep delivering PERFECTION no matter how ordinary your sale. Perfection is a long term price ruler
  36. 36. Disclosures: • The principles and guidelines spoken about in this presentation are strictly my own ideas and MAY NOT be feasible/practical for you. • This document should serve as a guideline and reference - not as a rule book!
  37. 37. Liked this presentation? Go through some more! • Basic Funding Concepts for Entrepreneurs • How to write effective e-mail proposals • How to make an engaging PPT • PR for Startups – a reference guide!
  38. 38. Connect with me! e-mail - alok@rodinhood.com Facebook facebook.com/rodinhood Twitter - @rodinhood My social network for anyone enterprising! therodinhoods.com Presentations – www.slideshare.net/rodinhood
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