Pricing help for a new product please

kaya

Hoping for some advice and opinions on this one
Im a disabled engineer and had to give up full time employment about 2 years ago due to a dibilitating spinal condition, been trying to survive on incap ben for a while now, my wife works full time so i cant get any other benefits. Ive been fettling away in my shed for a while now and have built a fuel saving,emissions control device. My device will give a 10-30% fuel saving on any big diesel engine, lorries, buses,boats etc and also drasticly reduce the harmfull emissions of the engines, and i do mean drasticly, once fitted needs no maintenance. The device is not patentable for various reasonsand will be ready to market in two weeks, i have no shortage of interest and a european distributor lined up and waiting in the wings, ive been a busy boy, my dilemma is pricing my device, to a haulier with a big arctic this is worth vast amounts in fuel savings, tens of thousands per year for some companies. I have recently found that a company in the usa builds a similar device based on the same system, they are beginning a marketing campaign in the uk and foolishly believe that nobody will be advanced enough to compete with there product for at least two years! there arrogance will be there undoing. They are asking for a £50,000 upfront fee to secure a franchise for there product and retailing the units at about £10,000 each!!. Now im aware that my unit has huge savings potential and will be every bit as good as theres, in fact its a lot better, if you were me how would you price this unit for retail? I have an equal partner in my buisness venture and can see the money making potential is huge. I want to help the enviroment with this device which was its intended purpose but im also disabled and need financial security to take some of the pressure off of my wife, £10,000 to me is pure greed and profiteering, my costs for making this device are small as i do most of the work myself, Waddya think? What would you do? would you cash in and make as much money as quickly as possible? If you were a trucker what would you be prepared to pay for a 20% annual fuel saving?
I have an idea of what i want to charge but thought i would get as much input as possible before i go public
Thanks in advance for the help

savvy

Firstly well done you!

Secondly, you probably need to work out a pricing strategy to get it right, and not over price or undercut yourself. I've got a business studies book from university with this information in, I'm sure you could pick one up from the library or cheaply from a charity shop near a uni.

Ken-Dodds-Hairy-Knodule

I'd charge a fair price relative to the costs of the raw materials and my time spent manufacturing it.

I wouldn't just charge as much as the market would handle. It wouldn't matter how much a trucker/cab driver would be prepared to pay as that is profiteering.

Cardew

If the device is all you say it is and cannot be patented it will only be a very short while before it is copied and marketed by someone else - almost certainly a Far East/China company.

To cover your costs, you will have to make a 'killing' in the period before the copy version comes on the market. Or sell it at a low enough price that it will not be worthwhile to copy.

However without a patent you have big problems.

earthmother

In the short term, you need to price yourself so that you are not seen as the 'cheaper, inferior' option to this american product, but at the same time undercut them by an amount worth the hauliers interest. You can always bring your pricing down as you gain control of your market share.

At this point, if you do not already have one, I'd seek the advice of a specialist - there are those around who know exactly how to work these things out.


Your marketing will be of major importance - it has got to really push the superior qualities of your system over competitors, and back it up with unchallengeable proof (industry trials/official testing?).


As said, in the long term, an unpatentable product will be copied very cheaply by the far east market, and others. Is there absolutely no feature of your system that can be patented - if it is so much better than the US system, what makes it different? When Dyson first hit the market, he patented every single part of his machines individually, so no-one could totally copy them - he then had a unique product for the duration of his patent. I believe Trevor Bayliss (wind up radio) did similar.


Good luck, and I wish you success

ScoobieGirl

Price high. Lower than 1 years savings, but with a large enough profit margin that you don't have to sell too many units for it to make you what you want.

As savvy said get a book and swot up on the sucessful boys have done in the past.