How do you pick product price points?

[CDarklock]

For those who create products, how do you figure out what price a product should have - or, conversely, what you need to provide for a certain price point? Do you make the product first, or pick the price first?

[Ian Middleton]

I hardly feel I can offer someone of your ranking advice, but consider this:

See what CJ and C/bank products are the same or similar to yours and see what they are selling at. That is obviously your starting point. Raise the price at several points to test conversions and see which offers the best return for money invested in marketing?

I am sure you know most of that anyway?

Ian

[CDarklock]

Originally Posted by Ian Middleton

I hardly feel I can offer someone of your ranking advice

And yet, you offered an "obvious" solution that had simply never occurred to me. Sometimes I'm just shocked at how stupid I am, and wonder why anybody ever listens to me.

[Dr Dan]

We all learn from each other brother!

[WD Mino]

Hi C,

Yeah CB is a good way to see if one is selling or not but I use amazon and google to see what products in the category are selling for not just priced at and then put mine about 10.00 cheaper and offer more for it

HTH
-WD

[Chris Pambos]

You can create a price point first and then build your offer up to that price point.

[Dennis Gaskill]

Originally Posted by CDarklock

And yet, you offered an "obvious" solution that had simply never occurred to me. Sometimes I'm just shocked at how stupid I am, and wonder why anybody ever listens to me.

I think it's the "gotcha" grin in your picture.

I usually make the product first, then price it. Only once have I did it the other way around.

As for determining the price, I've created enough products and been selling long enough I have a pretty good idea of how much to charge, but I always test a few price points anyway.

I'll usually add it to my site at one price point, then offer it at a discount to my list. That way I'm testing two price points at once. If both convert at about the same rate, I raise the price! I may raise the price more than once depending on how it affects the conversion rate.

I think it's better to start low and raise the price than to start high and lower it. For one thing, no one gets cheesed because they discover you're selling it for less than they paid. Another reason is because lowering the price can seem like the product wasn't as good as you thought so you had to lower the price. I think that devalues it in the eyes of your regulars.

There is always a point where I quit raising the price even if the conversion rate hasn't gone down, and that price is when I honestly don't think the product is worth any more than that.

[markgilbert]

It has everything to do with the value perceived in the market you are approaching. That means you MUST know what other similar products offer in the way of training, software, tips, and methods of delivery. All that has "perceived value. The more you offer, the higher you can charge.

If what you are offering is unique, then you can charge a little more. But even if it's unique, there are going to be a lot of similarities to pieces of your material that are similar to others. When building software, writing instructions, providing a service, I always try to offer something more or different than competitors, thereby making the value proposition irresistible.