How to determine if people need what I'm selling?
You must do your market research. Some entrepreneurs dream up solutions to problems that do not really exist or rather only exist because of a personal need or experience. Doing your research will protect you from making mistakes. Then make sure your pricing is fair and reasonable.
There's a 'need' and there's a 'want'. In general, people are quite willing to pay 'more' for the things they want than they 'need'. So you will have to factor in both, when you are selling.
Let me show a few examples. Let's take two examples:
1. Vegetables: Needed - for survival. So it's a 'NEED'. But often, these items are available for super low prices and people are willing to negotiate with the vegetable vendors to death.
2. iPhone: It's a 'want'; definitely not a need. In fact, you could replace an iPhone with an alternative Android that's available for 1/10th the price and still have 99% of the functionality. However, people are willing to pay a lot more for iPhone.
Because iPhone is synonymous with 'greater' status in the society. Which is a 'want', not a need.
The point I want to make is that anything that has a 'desire' associated with it can be sold at a higher price.