A price is so much more than just a number. And finding that right number isn’t simple math. There’s also some art and science to it.
At the moment I’m writing this – in September 2014 – I actually haven’t decided on the best price for the premium My Brush Betty cleaning kit and her family of products. That’s because it’s a critical and difficult decision, and I honestly haven’t made up my mind.
First of all, did you know that through most of history, price was negotiated between the buyer and seller directly? Setting a common price for all is more of a modern invention. And while it’s certainly easier than negotiating individually with a bunch of people one by one, it also comes with plenty of complications.
Your price (obviously!) has to cover the costs of making, selling and delivering your product or service. But it also has to be high enough to leave something left over to put back into the business to keep giving it forward momentum. In addition to paying yourself.
So, one of the basic challenges of setting a price is this: You need to make sure you set the price high enough so that your gross profit (revenue minus costs of goods sold, such as manufacturing and packaging) is high enough to cover your operating expenses (things like legal bills for patent applications, graphics, website design, etc.) and leave enough cash on hand to do things such as buy more inventory and deal with surprises or things you didn’t plan for – or maybe didn’t plan enough for. (P.S. There are always incidental surprises).
Price can also be psychological, so setting the price can cause people to make judgments about the product itself, about whether it’s a premium product or a trendy piece of junk. There are also lots of little pricing conventions in the marketplace that signal psychological clues to us, too. Did you ever notice, for example, that discount stores often end their prices in .99 or .95? In luxury stores, they usually go with even numbers and don’t even list cents at all. The price is just stated simply and cleanly: $60 or $750. Generally speaking, even-number pricing (versus odd-number pricing) is definitely viewed as premium pricing.
Assessing the Competition
Now, My Brush Betty is pretty unique on a lot of fronts that make it worthy of a premium, but there are a few competitors in the same beauty aisle that are worth examining. I’ve been taking a look at three products in particular:
- The Sigma Spa Brush Glove. Priced at $35-39, including shipping, Sigma Beauty offers two types of gloves that come in some fun colors! Essentially, this is a big silicone oven mitt with a lot of raised surfaces on it that you scrub your brush against with some liquid soap. You still have to pretty much wash each brush individually, although you don’t have to get your hands dirty like with hand washing. Also, it doesn’t come with a drying solution.
- The Benjabelle Brush Tree. This is a drying product that allows beauty lovers to dry their brushes upside down. There are several different sizes offered, and the price ranges from about $24.90 to $44.90 including shipping. Drying your brushes upside down does, indeed, allow water to drain from the ferrule, but gravity doesn’t actually reshape the brush toe in a precise way. Which is important when you consider that the whole point of having specific brush toe shapes it to control how they deposit color.
- The Brush Guard Cleaning Kit. Now this product is arguably the most direct competitor as it offers both a cleaning and drying solution. Amazon lists it for sale at $38.95 including shipping. I actually like the brush sleeves in the kit a lot, although finding the right sleeve size when you need it and getting the right mix of sizes can be more complicated than necessary. I also found the little cleaning cup to be fairly useless and time consuming, as it’s so small you still have to wash your brushes individually.
So what did all that tell me about the price for My Brush Betty? Essentially, it told me that the competitive set is in the $35-40 range, for a few single-solution products in this area and one dual-solution product.
But it also told me that My Brush Betty is really a unique product worthy of a premium price! What is a premium? A premium is a price that is a little or a lot higher than the regular market prices. In order to get the market to agree to pay or support a premium, you have to offer something special or a unique value.
Looking at the competition, I concluded My Brush Betty is certainly worth a premium for a variety of reasons: It allows beauty lovers to wash a handful of makeup brushes at one time. It’s the fastest solution on the market by a longshot. The vibration created by shake-cleaning offers superior cleaning, to the cuticle, without ever getting your hands dirty. The angled drying mat allows water to drain from the ferrule, but it also allows for precise brush toe reshaping when used with our Reshaping Gel or a similar product. What’s more, My Brush Betty’s Brush Bubbles is also a superior product in its own right, a specialty soap designed to deep clean brushes covered in hard-to-remove products, such as sticky concealers. Finally, Betty is (obviously!) the best-looking solution on the marketplace.
But What Premium Price?
To be honest, if I couldn’t support a premium price with this product, then My Brush Betty would probably not even be economically feasible to bring to market.
One of the biggest cost challenges with My Brush Betty is her sheer size — she is 9.5 inches tall and 3.5 inches wide. Basically, having a relatively large product makes everything more expensive, from manufacturing to packaging to shipping.
Now, I just need to decide how much of a premium I could get on the price while keeping the product as attractive as possible and cover all of my costs … And thus began many late nights of price modeling on Excel spreadsheets and in a program called LivePlan, which I highly, highly, HIGHLY recommend.
There are lots of ways to approach this problem. You can decide to go with a low-volume, higher price strategy or a high-volume, lower price (even with a premium). And the trick to all of this is that you have no actual idea how many units the market will actually want. So you have to guess or edu-guess, which is the art in all this. Given the competitive price set, there is some suggestion about what the market is willing to pay in this arena. …
Did I get my pricing right or wrong? Only time will tell for sure. But how much would you pay to never hand-wash your makeup brushes again?