There are three common ways that businesses price their services.
Market Based Pricing – A company asks the question, “What’s the most amount of money the most number of people will people pay for this service?” Companies spend a lot of time and money researching how much people will pay, and how many customers are lost as the price increases to a new bracket. At some point, the number of customers lost outweighs the increase in revenue. So they charge the most amount possible before they lose too many customers to make the increased price worthwhile.
Competition Based Pricing – Companies ask the question, “How much are my competitors charging?” Prices are determined based on what competing companies are charging, and the relative services and incentives the company is offering. Company X charges $1,000, we’ll charge $950.
Value Based Pricing – A company asks the question, “What value does my service provide to the client?” So, for instance, if an author can expect to make $10,000 off their book, a company who is producing the book might charge $9,000.
Any of these methods would price our services much higher than the amount that we charge. Self-publishers are paying an arm and a leg for quality book production with our competitors. Other companies are charging $5,000 to $15,000 for similar services that we charge less than $2,000 for. And if we’re looking at value, our commitment to our clients is unmatched, and most of our clients earn far more money over time than they spend with us.
But we employ a fourth pricing model, Cost Based Pricing. We look at a potential service and say, “It will cost us $X to provide this service in cash out the door, and it will take us Y number of hours to do a great job. We want to pay our employees and contractors a reasonable living wage, so we need to charge this amount.” We don’t want to eat spaghetti every night, but we also don’t want to take advantage of anyone. So we figure out how much we need to bring in so that we pay our bills. That’s what you pay.
The world would be a better place if more companies adopted this model. So many companies are asking the question “How much can we get?” when they should be asking “How much should we get?”
I believe in self-publishing. I believe it’s a viable industry, and I believe that it can provide readers with great and valuable materials. But I also look at the self-publishing industry and think what a racket, no wonder so many people don’t take self-publishing seriously.
One of my fears is that people will look at our low prices and ask, “How can the services be as good if they’re only charging 20% of the price? What corners are they cutting?” I can assure you that the only corner we’re cutting is the one where we take you for as much money as we can. I’m confident that the materials we produce at Columbus Publishing Lab blow our competition out of the water, and our clients are profoundly more successful. We can do it for less, simply because we’re committed to charging a fair price.
We don’t have a large corporate structure or shareholders. We’re a family owned business full of great people who want to earn a fair living wage. We’re not here to maximize the profits on our spreadsheets. As the CEO, I don’t report to the board, I report to my wife and kids.
We’re not here to increase shareholder wealth, we’re here to make a fair living and do something we love. We’re here to provide a quality service that we think is important.