how to set a price for a product?

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i'm looking to start up an ecommerce business and would like advice on some specifics. i've done some research, but still confused on how to set a price on a certain product.

when you first started out, how did you know what to set your prices to?
#price #product #set
  • Profile picture of the author serpyre
    Minimum is 30% margin (gross profit) over cogs (your buy price plus shipping to warehouse) - that will give you ~5% net profit. Above that is up to you.
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    • Profile picture of the author AnthonyCapetola
      Originally Posted by serpyre View Post

      Minimum is 30% margin (gross profit) over cogs (your buy price plus shipping to warehouse) - that will give you ~5% net profit. Above that is up to you.
      Consider cost of building the site and advertising the product inventory. What eCommerce platform were you looking at?
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      • Profile picture of the author serpyre
        Originally Posted by AnthonyCapetola View Post

        Consider cost of building the site and advertising the product inventory. What eCommerce platform were you looking at?
        Ok, where do these people come from - that's the difference between gross and net profit! It's truly amazing people run stores and give out advice and don't even understand the basics.
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    • Profile picture of the author charlie9705
      much appreciated for your responses.

      @serpyre
      what sites or where would I procure sales information on a product to understand what's the average price that it's being sold for, how many are being sold a month, etc. in order to calculate margins?

      @AnthonyCapetola
      i'm looking at wordpress with woocommerce. being new to the industry, i'm not certain of the costs to build the site or advertising costs at this time. what i'm looking for is:

      what can i set the price of my product to in order to be competitive and maintain high margins?

      what resources are out there to find sales data for a specific product? ie. units sold last month, average price sold, etc.
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  • Profile picture of the author quadagon
    You might want to give psychology of price a look and dan kennedy has a bs book on pricing. Its a massive area and goes alongside placement and proposition. For my book business we looked at the competition in the market.
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    I've got 99 problems but a niche ain't one
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  • There are many factor to set up price for a product. If it is promotional products, demand will be more so price also at marginal level.. If it is wholesale product then price will be less..
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  • Profile picture of the author Gambling Attack
    Here is good article about numbers in price

    Also I recommend to read the book Dan Ariely "Predictably irrational"
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  • Profile picture of the author Solid Commerce
    As is probably becoming obvious in this thread, there's not always ONE super easy answer to this question.

    I think the real answer is...a whole lot of research. But all of the responses in this thread are absolutely really good starting points, and should all be considered equally alongside one another.
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    _ Sean B.
    Solid Commerce

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  • Profile picture of the author charlie9705
    i can appreciate the variety of techniques used in order to procure the set price for a product. i've done a lot of research but would like to get suggestions on how to see what a product is being sold for. maybe i'm not asking a specific enough question, let me try to rephrase it.

    i have one product. where can i go to find the average price that it's being sold for?
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  • Profile picture of the author celente
    why be confused, we spend weeks testing prices and after a few weeks, this can increase our ROI by up to 300%, so test you scrotum off. That will be the only way to do it. You can even hire someone else to do this for you.
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  • Profile picture of the author serpyre
    You go to Google, find the product or equivalent - then go to the competitors from the largest to the smallest - see their offerings - and compare. If you are looking for an automated method - no - it's all manual effort. Just start - the rest will become clearer as you go along.
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  • Profile picture of the author nooman ahmed
    find out what others are charging and then assess your position in that market, ie are you relatively new to selling in that market or do you already have a valuable presence in it. If you do then you can sell for a higher price. If not start with a lower price and once people start trusting you you can charge more.

    Hope this helps
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  • Profile picture of the author charlie9705
    @celente

    test your scrotum off, sounds like a viable method; i shall try this method.

    @serpyre

    besides using google, do you use ebay, amazon, or other avenues? what route has given you the best results?
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  • Profile picture of the author alevashov
    Hi there

    you may find useful this presentation about smart pricing (I created it to speak on one event).

    It is about extracting more value using such technics as versioning and bundling.
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  • Profile picture of the author charlie9705
    today i found a product that i'd like to sell. thereafter, i checked out my competition to see what they were selling it for and the prices were consistent throughout, around 10 bucks. fyi, most of them were big retailers, ie. walmart, amazon, ebay, etc. however, there was a similar product in the same niche/category but weren't sold in many of those retail stores; it was selling for 60 bucks (egregious if you ask me, but what do i know).

    should i be pricing it along the lines of the major players? if not, how can i command a price like 60 bucks for a similar product?

    why would someone come to my store to purchase a similar product that is higher than the norm?

    looking forward to your responses. thank you in advance.
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