Are you new in the business of selling your source code and do not know where to begin? Too often new programmers who are in the business either sell their code way too high or way below what their work is worth. If you are not too careful, you will lose your integrity and your market even before you get the chance to make it big on the Internet. Overpricing your source code is not the easiest way to get rich, but treating it as if it is worth almost nothing will eventually make you undervalue your own work, even the following projects that you will embark on.
So what are the best ways in which you can thrive and not just survive in the business of selling source codes? Here are some of the tips that will hopefully enlighten you and teach you some practical ways in knowing how the worth of your work.
The battle begins in your mind
Sometimes the very thing that keeps you from being objective about the price of your source code is the attachment that you have to it. More often than not, you will place a very high value on your work if you spent a long time thinking over how it is going to turn out. However, if you do not keep yourself from having this mentality, you will soon find yourself unable to price your source code well. Keep in mind that that the worth of your source code should not be dependent on the time that you waste on it, but rather on what it does. If it makes people’s lives easier, then by all means, put a hefty price on it. However, if it does not bring anything to the table, then be content with settling with the amount that the market dictates.
Know the economics
The most common concept in economics is the law of supply and demand. This law is applied even to the business of selling source codes. The standard formula when you are computing the price of a business is derived by multiplying the revenue by three and adding all the assets included. If there has been no revenue history, then the amount is to be dependent upon an evaluation or an estimate of the projected revenue. An almost similar computation is to be applied when you are coming up with the price of your source code. You can raise the multiplier when you have more buyers. When you talk to them, you need to emphasize how long before the buyer can recover his investment and start earning profits. Ideally, you need to convince the buyer that the return of profits will happen in two years or less to get a buy in. Regardless of how promising your work is, you have to keep yourself from being too greedy when you have no revenue to show off. However, if you have proven time and again that your work will sell out, then that is the time that you can have the right to dictate the price.
Be prepared before selling your source codes
Do not be naïve when selling your source codes. You need to know the reason why people should buy your code. If people will make money from it, you have got to know how much so that you will not be underpaid. More often than not, one of the reasons why they want to acquire your product is to improve theirs. With your source code, they can increase loyalties or offer more benefits to increase sales. So, if they are going to gain missions out of your source code, then might as well as for a higher price. You need to be streetwise when it comes to negotiating. The final price should range between your acceptable minimum price and the maximum price that they are willing to pay.
In order to know where you are going to stand when it comes to negotiation, just ask what is in for them. Be the one to first name the price so that you can have an acceptable baseline.
Some of the basic things that you have to keep in mind are what its depreciation value is going to be and how much would it cost be replaced. As a programmer, you have to know how complex your product is going to be. You have to sell the idea, not just the product. You have to make your product appear desirable or else it will be devalued. Moreover, you have to elaborate on what buying your product will entail because you need to keep your integrity intact or else that will be the last product that you will ever sell. You have to let them know if they will be needing additional training to understand or further develop your source code. They also have to be informed how long it will will take before the source code can be put up considering all the bugs that must be taken care of. With these in mind, both of your will know what you are getting into.
Stay up to date
Aside from knowing your competitions, you also have to know if some of the comparative values in the market. For instance, they would want to buy something from you for $10,000, you have to know how much it cost them when they bought an almost similar product. Lastly, you should have the foresight to know if your buyer is planning to generate multiple incomes from your source code. If they are planning to use your source code in this manner, then it is just right that you increase the price of your product.
A final note
Do not assume anything; know that there are buyers out there who will take advantage of your product. So, you have to thoroughly know your rights as a programmer. The best way to not fall in this trap is to negotiate smoothly and keep the communication lines open.