One of the ways to improve sales is to test out different price points. Often, when someone is not making enough money for the effort that they’re putting in, it’s usually due to using a poor pricing method. Inaccurate or not very well-planned pricing is especially true for digital product creators. We are all familiar with the cost of goods when it comes to a physical product, but digital products have a cost too even though that cost goes down per product the more you sell.
When you calculate profit, you’ll want to reduce your revenue by what you spent to get the product ready for sale and to market it and sell it. For example, you have expenses for writers, content buying, editing, graphic design, and so forth for every single product you make. Even if you do it all yourself, you have spent your valuable time, and that should be included.
You can use online calculators (https://www.calculatorsoup.com/calculators/financial/selling-price-calculator.php) to help, but most of the time, pricing, especially for digital products, isn’t as precise and you can actually play with these numbers to test your audience to find out what they’re willing to pay. Set your prices too low, and you may lose sales because they think the product is cheap, set your price point too high, and you may price out your audience.
Pricing Your Products
When you price your digital products, you’ll want to consider several factors:
- The Cost to Create the Product – Remember to figure in your time and not just the direct financial costs. Your time is worth something too.
- The Price Point Your Audience Can Pay – How much extra money your audience has to spend on things that they don’t need or something that they do need if you sell a commodity is also an important thing to know to help you price your products.
- The Value the Product Provides the Buyer – If your product can save your buyers a substantial amount of money or time, that can also inform the price point.
- The Amount You Want to Earn – This is an essential factor that is often left out when pricing something. If you know you’re going to get about 50 orders of anything you promote, due to checking your stats, that is a good way to determine how much you need to charge to make a good profit.
Once you’ve set your price points, you can test out different methods of payment, such as allowing your customers to pay monthly, quarterly, or yearly or even offer a onetime lifetime payment depending on the type of products you are promoting. For example, some prolific information marketers sometimes sell keys that entitle the buyer to everything they ever produce now and, in the future, to raise money. Often, they sell these keys for more than a grand each and limit the sales to five to ten people out of an audience of thousands. Another way to find out what price most of your audience wants to pay is to offer a “pay your own price” sale. Then change the price to the average amount your audience paid. As you work on pricing, think outside the box a little and remember to put your customers first but don’t discount the worth to your customers of you making enough money to keep existing. After all, they need you and your solutions.
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