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HOW DO I PRICE MY PRODUCTS?
Pricing is an art, as well as a science. Too high, and you’ll turn genuinely interested buyers away; too low, and people start doubting the quality of your product.
There are many factors to consider when determining your price. Here are a few tips to get you started:
Know the market
There may not be a market price for your product, especially when it’s an original idea. But it pays to find out what your competitors are charging for products in similar categories. Go window shopping online! Ask your friends! Send out an online survey! Once you’ve got a good gauge, you can decide which end of the price spectrum you want to place your product.
Consider your audience
Pricing is relative to your customers. Practical buyers who look out for functionality rather than form will not be willing to pay a premium for aesthetics. On the other hand, there are customers who will shell out extra for exclusivity and design. Take a look at your product. Who is it created for?
Higher volume or higher price?
We offer royalties of up to 70% of the net profit. In the case of a downloadable product, this usually amounts Do you want to charge a higher price to earn more per item, or a lower price to profit from a higher volume? This is a decision you have to make, depending on whether your product has niche appeal or is created for the mainstream market.
Work out the costs involved
This is a little technical. Determine the all the costs incurred: Direct costs such as money spent on research and development, opportunity costs such as time invested in the creation and fine-tuning processes, and fixed costs such as rental for an office space. Add them up and divide the figure by the targeted sales volume. This gives you the break-even price for your product. Then mark up the price so you can earn a profit!
Keep up with the market
The price that you set now may not be optimal in the future, simply because market conditions, like the demand for your product and your competitor’s strategy, change over time. So always be on your toes, and be ready to make adjustments.