Assuming that you have already acquainted yourself with the intricacies of product creation as well as the myriad forms of advertising tactics that can be implemented online, we will now discuss a matter that could make or break your success in internet marketing.
Now, what we will be discussing is a subject that many online businessmen have taken for granted. It is that very thing that would connect your business to the affirmative action of your visitors. It is that very thing that would convert your visitors into paying customers.
We're talking about the price for your product.
How exactly should you price your product? Naturally, you would want to reach a range that would recover the investments you have made for its creation and promotion. This is called the break even point. Anything above the break even point would be considered as your profit. Naturally, again, you would want to attain as much profit as possible.
So these are the two things that determine price:
1. how much you have invested; and 2. how much you want to earn per item
There are two approaches that are generally used when it comes to pricing. Let's take a look at them.
1. Price your product a little over the break even point, and rely on the volume of items you will be able to sell.
2. Price your product substantially higher than the break even point, so that every sale would reap some substantial rewards.
If you foresee your product to be a hot seller, then the first approach would be the best one for your needs. You could just rake in your earnings through the several sales you will be able to achieve.
If you foresee slow sales for your product, then the second approach would be more appropriate. Each sale would give you what you need, and you won't be pressured to sell a lot of items to realize your earnings.
But both approaches have their own shares of problems. Pricing your product too low might just give your prospective customers the impression that your product is of inferior quality. Pricing your product too high would alienate a large segment of the market.
Personally, I say that you should price your product for what it's worth. Let the market forces take care of themselves. If you bestow a fair price for your product, you won't have to worry about the backlash of consequences. Each product is a different case, and it merits special attention when it comes to pricing. Keep this in mind when deciding on the right price for the same.
But here's a very secret tip: you could use the price of your product to tremendously boost your sales. Yes, you read that right. YOU CAN USE THE PRICE OF YOUR PRODUCT TO TREMENDOUSLY BOOST YOUR SALES. This is through a process called dynamic pricing. Dynamic pricing can create an urgency that would compel people to purchase your product as soon as possible.
There are some tools that would allow you to implement dynamic pricing for your offers. The way it works is that you'd offer a product for an amazingly low price, with a warning that after a specified period of time, the price would increase. This increase would continue until the offer is priced beyond your market's budget.
For example, an eBook can be offered for a mere $5 today. After 25 hours, its price would increase by $5. And after another 24 hours, the price would again increase by $5 and so on and so forth. The result would be mass hysteria, as the members of your target market would line up in a hurry to purchase your offer while it is cheap.
Dynamic pricing is one of those novel marketing strategies that has proved successful for many online businessmen. It's worth the try if you want to experience an immediate rush of incoming orders.
Now that you have your digital informational product complete and ready to be sold, the next question is what to charge for it. How much should you ask for your work? That is a hard question to answer but the general rule of thumb is: The more potential customers there are for your product the less you can charge for it and the opposite is true. The fewer potential customers there are, the more you should charge for it. Think about how products are priced out in the brick and mortar world. In very exclusive shops, where very exclusive products are sold to only a few well-heeled customers, the prices are high….VERY high. On the other hand, prices of similar products are priced much lower in department stores and even lower in giant chain stores like Wal-Mart. The reason that the products are priced lower is because there are a lot more buyers for them and more product will be sold. It is just simple mathmatics. You can sell 10 people an item for $100 each and gross $1000. You can sell 100 people a $10 item and still gross $1000. The fact is that there are more people who can afford to spend $10 than there people who can afford to spend $100. There is another consideration to be made when pricing your informational product and that is that it takes the same amount of effort and energy to promote a $10 product as it does to promote a product that sells for $100. It takes the same amount of time, as well. Your product needs to be priced as high as it can possibly be priced. The amount of information in the product and how valuable that information is to the customers who will buy the product needs to be considered. Correct pricing is a balanceing act. Have you ever heard the old saying, “You can price yourself right out of the market”? If an informational product is prices too low, people think it will have little value and not be worth their time or effort to read it. On the other hand, if an informational product is priced too high, people might really want it but feel like they simply can’t afford the price. Consider the information that is contained in the e-book or other informational product. Is it new information that will help to solve a pressing problem for many people or only for a few people? Is the information contained in the product available elsewhere or is your product the only place this information can be found? Will it make people look better, feel better, make more money, have fun or solve a problem and is it the kind of information that people would be willing to pay a lot of money for or only a little money for? Will your informational product appeal to a very large pool of potential customers or only to a few people but be of a great value to those few? Sometimes, adding on some freebies or bonuses allows you to ask a higher price. Bundling products sometimes allows for higher pricing, as well. Pricing your informational product is a sticky and tricky problem. Pricing it too low is just as bad as pricing it too high. If there are similar informational products on the market, you should check their prices and not price yours too far from the center. Remember this…you can always lower a price but you can never raise a price on the same product so set your price at the highest level you believe that you can get because you will work just as hard for a $10 sale as you will for a $100 sale.
However, if you're willing to take a more reasonable approach, there are a number of ways in which you can generate a reasonable income just from promoting your site or your brand via forums. Get started by compiling a list of forums directly and indirectly related to your product. Create accounts on each of these forums and begin to slowly infiltrate. Find out what interests people on the forum, what they talk about, and what they spend most of their time doing. Additionally, spend the time to actually interact with people posting on the various forums you are reading. Let people get to know who you are and what you plan to do. After you've been a part of the community for a while, consider putting up a link in your signature. Additionally, if they have a section in which you can sell things, consider posting some of your products as a discount to bring people back to your site. Regardless of what you do on the forum in terms of selling and promotion, your ultimate goals should be to make contacts, to promote your brand, and to drive traffic to your site. All of these will come in time if you take an honest approach, rather than putting your site and your sales above all else.
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