The Crowd Supply Guide: Properly Pricing Products

Prices should be all inclusive and free of qualifiers or conditions. Prices need to be straightforward and clear. The price needs to reflect the complete shipping product: do not break down prices artificially. Explaining to backers what your budget looks like for shipping and fulfillment is strongly encouraged and should be added in a section in the campaign body. Naturally, pricing is also influenced by your campaign’s funding goal, so make sure you are familiar with that process before you come up with your pricing scheme.

Filling Out Pledge Levels, Pricing, and Shipping

Prices should be whole-dollar amounts and should include all other costs that go into the complete shipping product. Crowd Supply products all ship free to the US, so US shipping cost should be included in this figure. International shipping is calculated and levied on a per-item basis. Free international shipping is encouraged where it is feasible to do so (generally, this will only apply to small, high-priced items). If it’s not practical to offer free international shipping, consider offering free international shipping on accessories, but not the ‘primary’ product. More information on project fulfillment can be found here:

Charge a Fair Price, Not a Low Price

As a new creator, you may believe you’ll sell more if you charge less. However, despite what you may have learned in Econ 101, lower prices do not always result in higher demand and thus greater sales. In fact, there are a number of reasons why you should avoid under-pricing your product. Basically, no matter how you go about making and selling hardware, it will involve manufacturing, fees, importing and exporting, tariffs, etc. In our experience, a sale price that’s too low makes the whole process unnecessarily difficult with no significant boost to sales. Creating a clear, quality campaign with good content is far more likely to entice backers to purchase than lower prices. Similarly, writing good, clear, easily accessed documentation will do more to increase adoption than a low price.

In addition, underpricing does not help open source communities. We want the open hardware community to be sustainable and that means not producing hardware with an artificially low price. After all, someone who can afford a $20 dollar dev board can afford a $30 dev board.

The hard price floor (i.e., what you need to charge to break even on a simple board that costs one cent to make) is probably somewhere between $10 and $20 per unit. Importantly, remember you can make the selling "unit" whatever you want. For example, a two- or three-pack makes hitting the price floor much easier. Another way to look at it is to remember your campaign is a first step, the market validation required for a globally distributed product with a large, active user-base. Consequently, there are fixed costs associated with freight, packaging, warehousing, customer service, and after-order support that don’t really vary much between a low-priced product and a properly-priced product.

In some cases, those costs may seem unfair or inefficient, but they are the unavoidable ‘price of entry’ to reach a broad community with a global distribution network. This is true no matter where you go for sales and distribution. Your successful campaign is the beginning of a long-term relationship; you need to invest some time up front if you want it to be healthy and sustainable.

Question not answered here? Contact us to see how we can help.

The Crowd Supply Guide: Table of Contents

For Everyone

For Backers

For Creators

Getting Started

Before Your Campaign Launches

During Your Campaign

After Your Campaign Concludes

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