Competitor-Based Pricing is a method that utilizes competitor prices as a benchmark. You can use competitor-based pricing to adjust the cost-based price. Basically, you should look at the prices of similar products / plugins to decide your own price point.
|Simple, easy to use||Lack of your own pricing strategy that would take into consideration the peculiarities of your business|
|It might be close to what the market can reasonably sustain||There is a risk of price wars (especially when supply exceeds demand)|
To estimate the competitor-based price, consider the following questions:
Who are my competitors?
Do they propose similar products / plugins?
Do they offer more or fewer features?
How do competitors price their products / plugins?
How does the cost-based price for my product / plugin compare with the competitors’ offers?