subject: Pricing Your Product - The Bane of Low Prices [print this page] Pricing Your Product - The Bane of Low Prices
Not too ago someone asked me a simple question via Twitter and it spawned a multi-day programming spree. I ended up with a brand-new product and, as usual, I launched it to my list first -- I give people on my list first shot at my products as a thank-you for being a subscriber. And in this case especially, it really paid off for them.
Why?
Because I launched the product at $37 but over the next couple days I realized this was a tool that can mean a LOT more profit for people who use it. Charging $37 is almost disrespectful.
So I raised the price to $97, which is *still* a great deal for people who need the benefits this tool will give them.
I think we kind of get seduced by the all the free stuff we run into all day long on the internet and start believing that people won't pay a fair price for something. That's my problem, anyway. I'm a programmer and want people to use my stuff -- so I tend to price my tools lower in order to get it into the hands of more people.
And while that can be a legitimate list-building tool, it only works if you're marketing to a crowd who hasn't been exposed to you in the past. Most of my products are marketed to people who are familiar with my work, so the whole list-building strategy is kind of a bust.
While it's true you can sometimes make more money with a lower-priced product, you have to sell almost 3 times more at the prices I'm talking about to make the same amount of money.
Let's look at an example:
$97 x 100 = $9,700
$9,700 / $37 = 262
To make the same amount of money with the $37 product you have to sell 262 units. That's a lot harder than selling 100 units, for sure.
Sidebar: For people who think THOUSANDS of copies of each marketing ebook and tools are sold, think again. That's *rare* -- there are a LOT of things out there that sell just a few hundred copies over their entire lifetime. In some cases, maybe only a few dozen copies.
I realize some people will look at my product and say it's not worth $97, or $37, or even $7. That means it's not a good fit for them.
But on the other end of the spectrum, I know people who use this tool every day to make even more money and they know without a doubt that even at $97 I'm seriously undervaluing this product.
I still intend to give the people on my lists a discount when I launch new products, but I hope I'm getting to the point where I stop putting silly prices on tools that can make people a heck of a lot of money.
The next time you get ready to launch a new product, take a look at what it will provide people and price it accordingly. Low prices don't always have to win.
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