How you price your products is highly important.
This is also something which stumps a lot of business owners.
So how expensive should your products be?
Many people choose their price seemingly at random.
Otherwise they copy their competition…
…or go for the lowest price possible (thinking it will increase sales).
Both of these choices are boneheaded and a really bad idea.
Instead, you should raise your prices as high as possible.
Now, many people shun this advice.
They worry about being more expensive than their competition.
But this is really the wrong way to think about this.
You see, the same product sold at a different price will pretty much convert at the same level.
(And therefore bring in the same amount of revenue).
What this basically means is that you’ll either get one sale at $100, or 10 at $10.
That being said, there are other things to consider.
For example, let’s say you have an upsell or follow up product for $50.
Let’s also say around 20% of buyers purchase this additional product.
In this case your ten $10 orders will boost your revenues by an extra $200.
Not only that, you’ll also have 10 more customers who are twice are likely to buy in the future.
On the other hand, if you sell at $100…well…you’ll still have $100.
What’s more, you won’t have additional customers who may purchase additional products.
This is why many marketers sell their initial products dirt cheap.
(A good example of this are so called, “tripwire” offers).
Something else to consider is the quality of your customers.
In most cases, a higher price point should result in higher quality customers…
…while cheaper price points result in lower quality customers.
Depending on what you’re selling this can be extremely important.
Low quality customers are often a massive pain in the butt to deal with.
These are the people who complain, demand refunds, and make your life a living nightmare.
Many of these people are also price shoppers, who should generally be avoided.
Yes, they might convert easier, but this is often offset by the issues they cause.
What this all boils down to is that product pricing is entirely up to you.
Do you want less (higher quality customers) and more money per sale…
…or more (lower quality customers) and less money per sale?
Ultimately you need to consider the following:
- Do you have upsells and follow up products?
- How many and what type of customers do you want?
- How is your product is converting?
(With a lower conversion rate you may want more money per sale).
P.S. Everything I’ve mentioned also applies to people who sell services (except for a few key differences). For example, with services the question of quality clients is even more important. Speaking from personal experience, dealing with problem clients is absolute hell, and something you’ll want to avoid. Also, most service providers don’t have upsells or follow up products. For this reason service providers are advised to sell their services for as much money as possible.