How to pick a price for your first product

Most first prices are picked the same way: look at a competitor, knock a bit off, and hope. It feels safe. It usually means charging too little to people who would have paid more, while the costs that grow with every customer eat the difference.

This guide gives you a repeatable way to choose a first price, and a way to change it later without upsetting the people who trusted you first.

Start with the ceiling: what the problem costs them

If you did ten calls, you already have the best pricing data you'll get: what people spend today, in time and money, dealing with the problem.

Hypothetical example

Nobody will pay $600 a month to save $600 a month. But a product that saves that much has a lot of room above $10. The ceiling isn't the price; it's the reason you shouldn't start at the floor.

Check the floor: your costs per customer

Your price has to cover what each customer costs you, with a healthy margin. For most small subscription products, the biggest per-customer cost is payments: a typical US card charge costs 2.9% + 30¢, plus 0.7% if you use subscription billing^[1]. A merchant of record costs 5% + 50¢ per transaction^[2].

Then add what each customer uses: emails, storage, AI calls, text messages. Four products, four bills shows how differently these grow. If one customer could cost you $3 a month in usage, a $9 price leaves almost nothing.

Look at alternatives, not just competitors

Customers compare your price with whatever they'd do instead, which might be a spreadsheet, an assistant's time, or a bigger tool they already pay for. Write down three alternatives and roughly what each costs them. If your product is clearly better than the cheap option and clearly simpler than the expensive one, you can price in between with confidence.

Pick a simple plan shape

Pick the measure your customers already think in (clients, projects, team members) and that tracks your costs. Avoid three-tier tables with a dozen feature ticks on day one; you don't know yet which features people value.

Specific prices that work

• Prices you can say: $19, $29, $49. Easy to remember and to compare.
• Not too low: below about $10, fixed card fees take a big share, and cheap prices attract the least committed customers.
• Yearly option once people stay: "two months free" is the common default. See Monthly vs yearly.
• Currency: price in your customers' currency if most of them share one.

Test it before you commit

1. Put the price on your one-page test and see whether sign-ups hold.
2. Say it out loud to five people from your interviews: "It'll be $29 a month." Watch for a pause, not just the words.
3. Ask early users to pay from day one, even with a discount. People who pay give different feedback from people who don't.

Raising prices later, without drama

Your first price will be wrong; usually too low. Plan for that from the start:

• Grandfather early customers. Promise that people who join now keep their price for a year, or for good. It rewards trust and makes the first sales easier.
• Raise for new customers first. Watch whether sign-ups hold before touching existing plans.
• Give notice and a reason when you do change existing prices: what's improved, when it happens, and a yearly option at the old rate before the change.

A first price, worked through

Hypothetical example

Putting it together for the receipt-reminder product:

Why $29: it sits inside the range people already pay for related tools, it's a fraction of what the problem costs, and card fees take under 5% of it. The $19 early offer rewards the first customers and gives room to learn without the price being the reason anyone says no.

Six months later, if sign-ups at $29 are healthy and customers stay, that's the signal the price could go up for new customers.

How to talk about the price

• Next to the price, say what it replaces: "Less than an hour of your time a month."
• Show what's included in plain terms, not feature names.
• Say what happens after the trial or first month, and how to cancel.
• Don't apologise for it. A price stated confidently reads as a product that's confident too.

First-price traps

• Pricing from your costs alone. Costs only tell you the lowest price you can charge.
• Copying a competitor's three-tier table without their customers or their data.
• Unlimited plans for heavy products. Your most expensive customers will find them.
• Waiting for the perfect price instead of launching and adjusting.

Questions

Write three numbers on one line: what the problem costs your customer per month, what alternatives cost, and your per-customer cost floor. Pick a round price between floor and ceiling, then try it in the bill calculator.