How much is Too Much?

[jacylnong]

Have a product. Can't tell much about it because it's a software, meaning competition will be tight if i blurted it out.

But, the problem is that i'm relatively new to the Australian market.

Companies spend millions in building hardware to match up to this software.

But obviously, not planning to sell it millions because then I wouldn't be apart in terms of competitive pricing and well, its a software.

So how much can you actually charge for a software? :s is AUD 2.5k way too much? (another AUD 500 for seminar on how to maximize its potential if the people wanted it)

Please help me~ Thanks : )

[The Y-man]

Depends on the product, but here are some things to keep in mind:

How will you protect the intelectual propoerty (i.e. stop it being copied illegally)

Would it be better to sell a license to the product and collect royalty?

Have you got ongoing maintenance to sell?

If you run out of ideas, someone once told me double the cost (in your case would be development time @ $100 per hour) of the product (i.e. 100% mark up) and see how you go.

Cheers,

The Y-man

[jacylnong]

hey Y-man,

Thanks for the advice.

However, for the IT field, everything is copy-able.. all they need to do is just work from their competitor's code and change it here and there and make it a little better (the Xerox Story)..

So speed to market is what i am looking for.

Only thing is, my boss think I'm broken into 6 pieces to be in all major states in Australia to be doing the product.

Thinking about resellers or main distributors.. any marketing companies that you might have in mind that are good in Australia?

[The Y-man]

Our company purchases from groups such as Symantec, Software Spectrum, Ingram Micro.

Copying is not an issue if the customer is locked in with proprietary update requirements (eg security or legal), and is required to buy software maintenance. A "once off" product does not keep providing your business with continuing income, which requires continual innovation and development (not to mention "lumpy" income streams).

Cheers,

The Y-man

[JamesGG]

Hiya,

I've bought a lot of accounting-type software in the last couple of months. Probably close to $10k by now.

It's also been over the internet. Your boss might not need to sharpen that butcher knife for you after all, if you can work out a feasible plan in that sort of direction. Remote sales isn't so hard anymore.

Cheers

James.

[jacylnong]

Well,

Now I know how much it is to charge (actually just as much as i want), but as long as the price lives up to the quality and expectations and in comparison with the competitors... AHH... so much research! :D

Thinking of strategies whether to aim at resellers (means wholesale price...sigh*) or just by selling it online and launching ads in Aussie in every state .. *another thread coming up then! haha*

Anyway, thanks for the info james and y-man!

Sincerely,
Jacyln

[HWT]

Personally any software over $500 I consider too expensive. Most of what we have bought is in the $400-500 range, the rest of the software we have is free or $30 registration. I look at the $10,000 and $50,000 pieces of software and drool at them but there's no way I could ever afford something that expensive, so we just do without.

[jacylnong]

haha.. but then in my country, we sold it bout hmm.. 200? and sadly a reseller took it all and sold it for 5000?!?.. and well, there are a few 'normal becoming millionaires' people which arise from utilizing this product.. so u can imagine how much we are kicking our asses for not doing the research!!

[HWT]

Well you won't be getting unemployed to buy it at those prices, unemployment benefits are barely $200 a week (pension is higher) and that amount is less than the average rent in some places so unemployed/pensioners do it tough. $10k a year isn't a lot of money.

Now, single parents can rake in a LOT more than that (up to $60k a year tax free if they have lots of kids) so you'd be better off pitching it at stay-at-home mothers and people who are already employed and have savings but want to start a business.

It is very hard to operate a business on unemployment/pension, you actually have to earn a minimum amount or they cut you off for not earning enough, and you have to provide some phenomenal amount of accounting information, much much more than the tax department demands. I have to fill out a 20 page form and provide profit and loss statements just to declare my google adsense income.

[jacylnong]

i did think about what u said before you actually said it. To me, when i was researching, i was thinking 'why are they unemployed.. there must be a reason why they're unemployed' kind of thing.

The reason of going to the local papers to advertise is just a safer way so that a broader audience captures this product because basically anyone can start or would want to start a business.

To put billboards around areas are too risky when my boss wants me to target the entire Australia at the same time :s (excluding SA & NT)... so putting up billboards wouldn't be a smart idea (given the amount of time of research is only 1 and a half months?).. sigh

But still, thanks for giving me some information to clarify and open my eyes to a narrower target group :D

[HWT]

Your average mug out here is unemployed because unemployment benefits pays enough for drugs, beer and rent. It is extremely hard to break out of - we have just under 10% EMPLOYMENT here, everyone else is on welfare. This area is one of the worst but there's plenty of other pockets of high unemployment where people don't actually want to get off.

I do admit that my target income now I'm back looking to work again is $2000 a month, which comfortably pays all our expenses for 4 people, one car and 2 houses.