Let The Market Choose Your Price?

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Let The Market Choose Your Price?

By Stuart Reid

Setting the correct price is hard for any on-line business, and there are plenty courses and manuals dedicated to this delicate subject.

You want to have a price that will make you a profit, obviously. But you also want to have happy customers who feel you've charged a "fair" price.

The problem is too low a price will make your product seem inferior. Give-away products suffer even more from this "perceived value".

Conversely, if you charge too much (even though the price may well reflect the time and effort put into the product) you may get many disgruntled customers and many complaints which can have disastrous knock-on effects.

So is there a middle ground?

I'm sad to say not really, but there are a few methods you could try including a "crazy" trial I'm currently testing myself...

The most obvious way to decide your price is to see what the rest of the market is charging. This is not as easy as it sounds, since the "rest of the market" will vary widely.

Standard prices for e-books centre around the "magic" $27 figure, going up to around $47. Most ClickBank Merchants, for example, have a $50 selling limit - hence this price.

Seminars, Courses and one-on-one training services usually go for FAR HIGHER prices, up to (and over) a thousand bucks. This is out of the league of most marketers.

There are two ways to look at the problem. A Seller can either earn his daily bread by selling many copies at a low price, or selling a few copies at a high price.

10 x $40 = $400 and $4 x $100 = $400

I've kept the numbers simple, math is not my strong point!

You can see a lot from that comparison. You will probably put in the same effort to make those four sales as you would ten, right? It's what marketers have told you for a long time.

You'll find many high-ticket items are sold through affiliate programs. This is so the merchant and the affiliate can have a good cut - and the increased exposure from the affiliate army usually outweights lost sales due to the higher price.

Now here's the "crazy" system I'm trying:

Over at http://www.productpacks.com I've introduced "Pick Your Own Price"

Basically, a buyer can pay as much as they want for the item, and be allowed to take it guilt-free. It's like a donation, but it's paid in advance.

Using PayPals "donate" feature it's easy to implement in this in any site.

Why not give it a go on some of your lower-priced items? You may be surprised at the result!

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