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How You Should Price Your Product

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Posted 11th September 2014 at 09:09 AM by MikeMiller

I read a post in a thread where someone said, that you should always go for a high price to earn a lot of money. This is wrong for many reasons, and I will try to explain a few.

But before we get there let's start with an important rule:
You have to think about ROI, and not just pricing and earnings!

If your price is low, but it's still profitable and brings a huge volume of sales, then you have a good pricing.

There's the basic rule in economics: lower prices mean higher sales volumes, while higher prices mean lower sales volumes.
Of course this is not always true, but it is in most cases.

There is also the percieved value, what people think of your product before they buy it. If you put all the best information in a WSO, with more value than what others give in 5.000$ coaching programs, and you offer it for 1$, many will think that it's crap, otherwise why would you offer it so cheap? On the other hand of you offer it for 5.000$, many will think that A: it must be really valuable for that price, B: only a few people will buy it, so it is kinda special and rare.

Upsells, and OTOs and other added sales are also very important. Customer Lifetime Value is the key: what you can make from that customer on the long run. This is why many sell great-value products for low price and try to make the real profit on the OTOs, they understand that one customer does not mean one sale, you don't have to make big profit right away.
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