[stayjin]

Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue?

I can understand that when I don't have a clue about how much is my product value, I can probe the market for an optimal price setting, but... but then again I should not be clueless about my niche and my product costs, should I? If I have a concrete plan saying that I need to make 40% profit, why should I take 60%, even if someone is willing to give it to me?

Why can't I say "Well, thank you for your kind offer, but I value my work at this price, this is enough for me to make a decent living, with the extra money please go buy cookies for your kids or give it to charity or whatever."

I mean, I look at myself, making everyday choices about what I can afford and what not, I would like to buy a good quality thing if I can afford it, and the list is usually longer than my affordance... well, my customers are in the same situation like me, they definitely have one more thing they would love to buy with their budget if they can afford it, so why should I take advantage of the fact that they would pay more for mine, if I already make enough?

Like someone before said, does the author know why he was able to sell it at double price? Knowing who his target customers are, should he?

[drewcrawford]

One doesn't have to spend income wastefully or with a focus on improving one's lifestyle.

You can hire another developer to bring more software into the world, you can donate it to charity, etc. Income is merely a "money option", it doesn't mean you have to exercise that option in any particular way.

[jodoherty]

If you can get away with unreasonably high sounding prices, it's only because there's a demand for your service and not enough suppliers with your level of quality. As such, it's only a matter of time before someone comes by and undersells you with a similar service.

So it's not just "more fair" to set reasonable prices -- like your gut suggests -- but they also discourage competitors from appearing.

I guess the real question is whether or not you're willing to risk future competition for the short term benefits of increased profits.

[petercooper]

If I have a concrete plan saying that I need to make 40% profit, why should I take 60%, even if someone is willing to give it to me?

Because you might think you can invest the money more wisely than other people in terms of its net benefit. You might invest it into charities you believe in, into research on topics you think is important, employ people you think need jobs, and so on.

[msencenb]

"Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue?"

There is a fine line here. In my mind a product should be priced relative to the value it creates for people. If this price point provides more money than one needs to sustain daily life then I think its a perk. Besides that if I make a product that is making more money than I need, that gives me more of an opportunity to do a lot of things. Anything from building better more awesome products to donating my time or money to charity.

[stayjin]

I can see your point and I think "the value it creates for people" ( including both developer and customer ) is a good metric for how much it should be priced. The problem is, why should we assume that the price is the only ( or the most relevant ) proxy for "value it creates for people"...

[anamax]

> The problem is, why should we assume that the price is the only ( or the most relevant ) proxy for "value it creates for people"...

If you like, think of value as having economic and non-economic components. You're charging money for the economic value.

[sp332]

Sure, that's what's neat about a market. The customers wouldn't pay this price if they thought it was unfair. It's not like he has a monopoly, or there's any other pressure for the customers to buy his product. If the customers are getting more than $20 of value, then charging $20 is a fair price.

Also, over the long term, it could allow him to cash out or retire or whatever sooner, so the total amount of money he takes from other people over his lifetime might not go up as much as you'd think.

[JohnBogrand]

By not maximizing profit you are leaving money on the table that you earned. It's like going to your boss and saying hey why not give me a pay cut. I really deserve less. But I think what is worse is in the corporate world your job may or may not really add value to the product or service but just add cost. When you are pricing your own good and service in essence your capturing the value you created for your consumer.

[killerswan]

Just balance your marginal cost and customer demand to choose production and pricing that maximizes your profits... http://en.wikipedia.org/wiki/Microeconomics

If you know customer demand so well that you don't need to experiment, that's awesome.