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How Is The Price Determined?

by Linda T
11 replies
Hi everyone!

I am new to WF, and was told that you are the best and most helpful people that work online.

My question is...how do you determine the price of a product. For example, what makes one audio interview worth $67 while another is $97. Or an ebook worth $27 versus $47.

Is there a type of formula that is used, such as so many cents or dollars per minute or page? Or do you just say...Oh this price looks good for this product?

I understand that the content has to be extremely top notch and that the product should always excede the customers expectations.


Thanx everyone in advance for your help.
#determined #price
  • Profile picture of the author Tang
    Linda, it's a bit like real estate--there are several valuation methods, but the "sales comparison approach" is most common... in other words, what have similar products out there recently sold for?

    Welcome to WF!
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    • Profile picture of the author BigDaddys101
      Alot of the value has to do with the offer and whats inside the book. You can't just value something at what it looks like or what some one else is charging.

      You could have the coolest looking cover and best sales page but if the content is not useful the book isn't worth a dollar
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  • Profile picture of the author tpw
    I use testing and tracking to determine my prices...

    The trick is to get as much as you can get for your stuff, without exceeding the amount that people think is a fair price...

    I have honed the prices for my services over ten years, after much trial-and-error... I can get more for my services, but at a certain point, the sales volume drops to a level that makes it better to stay with the lower price...

    To my knowledge, there is no easy formula... At least, I have never found an easy formula to follow...
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    Bill Platt, Oklahoma USA, PlattPublishing.com
    Publish Coloring Books for Profit (WSOTD 7-30-2015)
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  • Profile picture of the author activetrader
    Several things to consider:

    Supply/Demand - what is the willing buyer paying for what the willing seller is selling?

    What does your competition charge for the same type of product/same quality

    Who are you selling to? If you sell to your own list you should already know what their buying power is; if you are selling to strangers the price point can be a lot lower (entry-level product point)
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    Me

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    • Profile picture of the author x3xsolxdierx3x
      Originally Posted by activetrader View Post

      Several things to consider:

      Supply/Demand - what is the willing buyer paying for what the willing seller is selling?

      What does your competition charge for the same type of product/same quality

      Who are you selling to? If you sell to your own list you should already know what their buying power is; if you are selling to strangers the price point can be a lot lower (entry-level product point)
      But, even if you have a great product, with superior quality, you still have to get the right sales copy....selling products, especially online, can be a tricky beast to conquer.
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      • Profile picture of the author joefizz
        Originally Posted by x3xsolxdierx3x View Post

        But, even if you have a great product, with superior quality, you still have to get the right sales copy....selling products, especially online, can be a tricky beast to conquer.
        Yes but that wasn't the question. Activetrader is right ...it is simple economics! Keep the content good, create a scarcity and the price will rise....

        As you are setting it you might want to test and adjust!

        HTH

        Joe
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        • Profile picture of the author x3xsolxdierx3x
          Originally Posted by joefizz View Post

          Yes but that wasn't the question. Activetrader is right ...it is simple economics! Keep the content good, create a scarcity and the price will rise....

          As you are setting it you might want to test and adjust!

          HTH

          Joe
          Are you speaking to me here? What should I test and adjust?

          (or, was that a general statement about setting price?)
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          • Profile picture of the author Linda T
            Thank you everyone for taking time to answer my question.

            I guess it is time for me to start doing some testing. lol
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            • Profile picture of the author Tang
              Originally Posted by dtang View Post

              ...there are several valuation methods, but the "sales comparison approach" is most common... in other words, what have similar products out there recently sold for?
              Originally Posted by Linda T View Post

              I guess it is time for me to start doing some testing. lol
              Linda, just to clarify...

              I agree with later posters who emphasize the importance of testing...

              ...but before you can begin testing, you'll have to set an initial price, yes?

              The sales comparison approach will help you do that.
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