Expanding into the UAE market: what B2B sellers underestimate
Entity choice, the VAT thresholds that decide when you must register, and the sales cycle length that quietly breaks first-year plans. A practical read.
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Most pricing conversations start with what everyone else charges. That is the one input that tells you least about what you should charge.
Ask a founder how they priced their service and the honest answer is usually some version of this: they looked at two competitors, picked a number slightly below the higher one, and have been quietly adjusting it ever since. It is not a stupid method. It is just a method that stops working the moment a buyer asks why the number is what it is, because the real answer cannot be said out loud.
Pricing a service is harder than pricing a product for one structural reason. A product has a unit cost that exists whether or not anyone buys it. A service has a cost that is mostly your team's time, which you are paying for regardless, so the floor is soft and the ceiling is set by something you cannot see, which is what the buyer believes the outcome is worth. That gap is where every pricing argument happens.
There are really only three ways to arrive at a number. Everything else is a variation.
Cost-plus starts from what delivery costs you and adds a margin. Competitive starts from what comparable providers charge and positions against it. Value-based starts from what the outcome is worth to this buyer and takes a share of it.
The usual advice is that value-based is the sophisticated answer and the other two are for amateurs. That is half right and it skips the part that matters, which is that value-based pricing is also the only one of the three you cannot defend without evidence you may not have.
Work out your fully loaded cost anyway, because it is the number that tells you when to walk away. Fully loaded means the delivery time at the salary cost of the people doing it, plus the sales time it took to win, plus the share of overhead that engagement carries, plus the time you will spend on it after it is nominally finished. That last item is the one most people leave out and it is often the difference between a profitable account and a busy one.
What cost-plus cannot do is set the price. A buyer does not care what it costs you, and saying "this is our cost plus thirty percent" invites them to attack the cost. It is a floor. Below it you are buying revenue with your own margin, which is a decision you can make deliberately for a reference client and should never make by accident.
Looking at what others charge is useful, but not for the reason people think. It does not tell you what the market will bear. It tells you what the market has been trained to expect, which is a different thing and often a legacy of whoever priced first.
The trap is anchoring just below the visible competitor. It reads as a concession before the conversation starts, it makes you the cheaper option rather than the different one, and it hands the buyer a comparison frame in which you have already agreed you are the same service. If you are going to price against a competitor, price above them and be able to say why in one sentence.
The logic is unarguable. If your work produces a measurable gain, a share of that gain is a fair price and both sides win. The problem is evidentiary. To charge on value you need the buyer to agree, before the work, on what the outcome is worth, and on the baseline it is measured against. In most B2B services that agreement does not survive contact with reality, because the outcome depends on things neither of you control.
Where it does work is where the baseline is unambiguous and already measured. A process that takes forty hours a month has a number attached. A licence being replaced has a renewal figure. A tender you are helping win has a contract value. If you cannot point to a number the buyer already tracks, you are not pricing on value, you are pricing on a story about value, and the buyer will discount it accordingly.
This is the same discipline as scoping a build before anyone commits to a figure. Rivl has a useful piece on the mechanics of that, on scoping a project before anyone writes code, and the argument transfers directly: the unknowns you fail to name before signing become the unknowns you absorb after.
This is the part that has changed and that most pricing advice has not caught up with. If you sell into Saudi Arabia, your invoice is no longer a document you produce. It is a document that is generated, structured and, in the second phase, cleared through the tax authority's platform.
The Zakat, Tax and Customs Authority describes e-invoicing (Fatoorah) as "a procedure that aims to convert the issuing of paper invoices and notes into an electronic process that allows the exchange and processing of invoices, credit notes and debit notes in a structured electronic format between buyer and seller". ZATCA rolled it out in two phases, the first from 4 December 2021 and the second from 1 January 2023, and publishes an electronic invoice data dictionary and an XML implementation standard that define the fields.
The commercial consequence is simple and underrated. Informal price adjustments, the retrospective discount, the quiet write-off, the invoice reissued at a different number, all become structured events with credit notes attached. That is fine if your pricing was deliberate. It is uncomfortable if your pricing was a negotiation you intended to finish later. Price as though the number is a matter of record, because increasingly it is.
You will discount. The rule that keeps it from eroding everything is that a discount buys something. Longer term, faster payment, a case study you are allowed to publish, a reference call, a narrower scope. A discount given for nothing teaches the buyer that your first number was not real, and every subsequent number will be treated as an opening position.
The corollary is that if you cannot name what the discount bought, reduce the scope instead. Same price, less work. It preserves the rate, which is the thing you are actually protecting, and it forces a useful conversation about what the buyer genuinely needs.
Calculate the loaded cost so you know your floor. Look at competitors to understand the frame you are being compared in, then decide whether to accept that frame or break it. Price on value only where the baseline is a number the buyer already has. Assume the price is a matter of record, because the invoice makes it one. Make every discount buy something.
None of that produces a formula, and anyone selling you one is selling a formula that works for their business and not yours. What it produces is a number you can explain, which is the only real test. If the buyer asks why and you have an answer that does not embarrass you, the price is defensible. If the answer is that it felt about right, you have a rate you will be renegotiating for as long as the account lasts.
Two related pieces if this is live for you right now. The qualification discipline that stops you pricing work you should have declined is in where deals actually die, the build-versus-buy version of the same cost question is in outsourced business development versus hiring, and if the pressure to discount is coming from an empty forecast rather than from the buyer, the problem is upstream and is dealt with in a pipeline you can actually forecast.
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