i) Competitive factor
We do not have control over what our business competitors setting the price for their product or service, they may sell cheaper than you with the same quantity, more expensive than you or even same price as you can provide.

In most of the industries, the price range are usually falls in a certain range among the market players, it is hard for the companies to undercut each other significantly. As a home based business owner, you could probably charge lower than your competitors just because you have a lower overhead cost.

ii) Demand factor
If the product or service that you provide is with high demand, you probably could save much of your marketing and advertising bucks, you can charge your customer at premium price and you can probably do not need to give a discount. On the other hand, if you are selling a low demand product or service, you might have to lower the price to capture more market share. However, no matter how low is the price you can set, there is a bottom line where you meet the breakeven, so know your price before you start selling.

iii) Economic factor
If the economy is strong, then the consumer has more cash on hand to spend which could keep the product’s price stable. If the economy is down, the product’s price is usually lower where the business owner have to capture as much sell as possible from the customer with limited cash on hand. If it is foreseen that the economy is going downturn, do not ever try to launch a luxury product or service, because the consumer will rather keep the cash on hand or to spend it on the basic needs than to purchase a high end luxury product.