Essay · Long-form essay plus transcript, ~30 min read

Ramit Sethi and Patrick McKenzie On Why Your Customers Would Be Happier If You Charged More

Patrick McKenzie (patio11) · Kalzumeus Free Beginner

Founders selling their own product almost always price too low, because they see every flaw in what they built and undercharge to feel safe. This is the canonical argument for the opposite instinct: take the highest number you are considering and go higher, because low prices attract the most demanding customers and signal low value. It is a starting point for your nerve, not a pricing method, so pair it with the harder value work in the other two picks.

  • You are almost certainly underpricing: the highest number you are comfortable with is usually still too low.
  • Cheap prices attract customers who perceive the least value and make the most unreasonable demands; higher prices attract better ones.
  • Price high and build the value to support it, rather than dropping price to apologize for early rough edges.
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The question it answers

  1. How do I price my product when I am selling it myself and have no comparable competitors?

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