Many times when we try to make up prices for products and services I’m sure most people factor in items such as how much it costs to actual provide the service or product in question and then you factor in how much you want to make on each sale. However, today I was hearing a story how one person simply prices it based on what people are willing to pay for the most part.
The example was kind of funny too I thought as it came from a hair salon owner. Essential, in her business she offers services such as haircuts and nail painting. She was saying how many times if a women gets a haircut which costs $50 they would be very hesitant as they consider that very expensive. However, for one reason or another she was saying how these same people don’t care about paying $60 every two weeks to get their nails painted. She was even saying too that she found haircuts to be more difficult.
Even I am still wondering why someone as a consumer would have that train of thought. An interesting thing about that line of business though is I know a person who mentioned that they own a nail salon and their strategy was to simply go into a rich neighborhoods as wealthy people seem to not mind paying an absurd amount of money to get their nails done too. I guess the easiest way to determine pricing this way is to simply visit as much businesses in the area to see what they charge as that is usually a good hint at what people are willing to pay in terms of a premium price.