One of the most commonly asked questions is, "How much do I charge for this?"
Determining your pricing strategy is extremely important for you as a business owner. If you set the price too high, you won't make enough sales to break even.
If you set the price too low, people won't take your price seriously and be wary of buying, plus you will be missing out on the amount you could be earning.
So how do you determine the price point of your product or service?
Firstly, put yourself in the shoes of your target market. How much would they be willing to pay for your product?
There is no point offering a $ 10,000 product to help people get out of debt, for example, they aren't going to have the money for it. You need to understand what you target market would be willing to pay for what you are offering.
Secondly, you need to understand your own needs. How much do you need to earn from the product? What costs do you have to cover? If it costs you $ 10 to produce a product then selling it for $ 5 would be commercial suicide … unless you have a more expensive back end product that sells well.
An excellent method to help you determine your pricing point is to understand what your competitors are charging. Check out your competitors and see what they are offering and for what price.
This will give you an idea of what the market can handle in terms of price.
If all the products in the market are priced in a certain range, then you can say with reasonable certainty that this price range is the maximum and minimum the market can handle. There may be ways to boost the price of your product, so long as the market can handle it.
It can often be worth buying competitors products – not to steal their ideas, but to see the quality of their product. If they are offering a 30 page e-book that is full of white space for $ 30 then if you produce a 50 page e-book full of information then you can probably charge for more.
Something like audio or video accompanying the product will boost its value, but again, only if the market can handle that increase. Shipping the product on physical media can again improve value, but this may be offset against lost sales due to lack of instant gratification.
Setting your pricing strategy is extremely important for your Internet business. Set the right price and your profits will flow. Set the wrong price, and you risk making a loss or few sales.
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