How Much Will I Charge

Pricing is very interesting when creating a product because it can make or break a business and if your business is not flexible enough to change prices then you're going to have trouble. For my tech gym (name still undecided) I have come to a price of $14,999 to set up a gym and a price of free for the app for users to use.

The reason I set a price of $14,999 was for three reasons. Firstly, we have a lot of equipment that we are going to have to set up around the gym, which can vary from gym to gym so we might incorporate smaller prices for smaller gyms. I estimate that the process is going to take about a day or two to do. This is because it will probably be two workers fitting all the machines with the hardware necessary for our app to work, and then gym members trying to use machines we are working on. Those two workers have to be payed and the $14,999 should cover that, since if each works eight hours a day for two days is 32 hours, and $20 hour would be $640 dollars for two workers, still plenty of space for profit. Secondly we have to manufacture the equipment, I don't expect it to be super high tech, just lasers and sensors connected to NFC on phones. Thirdly, from class you talked about how companies didn't take your software seriously because it was priced so low, once you went up 2000% it price people took it seriously, and the name change helped too, adding "enterprise". So for gyms to take us seriously we have to price at a decent price for them to not go bankrupt and for us to still make profit off it. That is why I believe the $14,999 is a fair price.

The second product, the app, is priced for free for two main reasons, data and huge market. One of the revenue services we are going to be providing gyms is the data from the machines tracking members, and in order to do that we need the members to download the app, making it free makes the barrier to entry easy. This ensures that we can get the most amount of gym members using our app in a gym with our hardware. Also, another reason for making it free was that the market for fitness trackers is huge. There are millions of people go to the gym, and even more who exercise outside with body weight exercises like running, swimming, biking, hiking, etc. So if we can get those users using our app they will be more compelled to try out a gym, and thus use the gym hardware. This translates into more members for the gym and more data for us. It also presents an oppertunity to sell targeted ads to members now that we know what exercises they do in and outside of the gym.