The higher the price - the more money you make?

Your price points will affect sales volume.

Which route is better, depends upon how your target
market respond to your specific offers and price points.

You'll have to test these options for yourself.

Also...

Consider developing a sales funnel where you have a
low-priced front-end product to get more people 'in
the door' and then present your higher priced products
on the back-end.

Dedicated to mutual success,

Shaun

I'd have to go along with Shaun on this one. Guessing is the wrong game, you have to do some testing.
And it's true that no one here can't tell exactly how your market might respond. Also true that if high priced product is offered to the right segment of the market, they'll be as easy to sell as cheap ones.

You should first brainstorm a bit:
-Are there any other products being sold in your target market with bigger price tickets?
-What do they offer that might justify the price? If there are, it means some people are willing to pay bigger bucks.
-Who are those people?
-How can you reach them, where do they hang out?
-What's your email list like?
-Would they buy higher priced products? Consider doing a survey, ask them.

And then we get to a more in-depth issues like positioning/differentiating yourself or your brand from the competition and marketing, psychology, etc.

Consider actually making that higher price product and offer it! What's the worst that can happen?
Don't be afraid of failure. Fail fast, if you have to, then you'll know what to do next time. However it may sound to you right now, failure brings clarity if you're tough enough and committed.
I failed quite a few times before finally nailed it! So have many others.

Do your homework, research your market the best you can, and if the signs seem right, go for it!

All the best,

Veo

I agree with Shaun and Alex above, furthermore, I suggest researching your main competitors who offer similar products or serve a similar customer set. If they currently sell to this audience at the $497 price point then you have a much better probability at that price point.

In my experience, for new products we always look at the competitive set and price ladder of similar products that serving the target customer. Ie. if I am in selling say choc chip biscuits for $2 per packet of 10. I want to sell a box of 30 same biscuits for $4 per box. However i don't want to risk making the product unless I know there is demand for it. I will research to see whether (1) my competitors sell biscuits at a similar price point, (2) is there a value proposition that attracts my current customers to consider trading up from $2 per packet to $4 per box and (3) have I attracted a new customer by offering better value at a lower price than my nearest competitor.

As to your profitability, that's not possible to comment without knowing your cost base.

If no competitors then consider a market research survey to see whether they would pay $497 in return for XYZ.

If all the above boxes are ticked then your chances of success increases. Delivering your promise is now in your hands.

Hope this serves you.

The higher the Quality - the more money you make. That's it!

Ultimately you have to test but the higher you charge on a quality product the more you can pay affiliates. You can also afford more in advertising cost. PPC, banners...etc

One other point: It's not an either $97/or $497 choice. Both products should be tested at various price-points ($87, $79, $109, $107, etc. for the cheaper product; $397, etc. for the more expensive one) to really see. Ref Portland's comment above.

Thanks everyone.
I'll make it worth 1000 bucks..and try to sell it for half. If people don't buy, I'll go down to 400, 300, 200 and all the way to 97.

In that way, everybody wins.

Cheers

I think that the price is not factor..
And if so, I think that $97 product will make you more money than $497 product.
Let me explain you why:
Your goal is to build long term business, so it's means the real equation is:
More Buyers = More Money
When you got 1 buyer, you got his details(email, name,etc), now, you can sell him more than once, so you need a lot of buyers to sell them again and again and again...

Hope you got my point,
David

It all comes down to supply vs demand.
factor 1 : using your method.. the customer should be able to atleast break even.
factor 2: there is no cheaper competition out there
factor 3: your customers have bought something cheaper from you and have liked it. i would pay $97 for a product based on reviews... i would pay $497 based only on previous experience with a seller

In my experience, it's always been easier to sell 1 unit at $497 than to sell 10 units at $47.

Why? because, unless you're a master at traffic generation and/or affiliate JV brokering, traffic is eventually limited, and I personally find it easier to increase my product's value 10-fold than to pump my traffic 10-fold (or whatever it is).

Furthermore, there's the leverage factor: if your product sells at $497, you can spend heavily in customer/lead acquisition (banners, Pay Per Click campaign, solo ads, Facebook ads, etc). In the other hand, if your product is priced low, you don't have that much margin and it's more difficult to breakeven on your traffic campaigns.

Obviously, this is all assuming your conversions don't tank at $497, meaning that you can indeed provide perceived value to justify the higher price.

Well, why don't you try upselling your $497 product to your $97 customers? You could also sell the $497 product as a standalone product. This way, you'll be testing both price points and you'll know which one works better for your niche and target audience.

For example, if your target audience is a group of people who can't afford to spend $497 on a product, but they'll buy a $97 product to help themselves, then you'll be losing a lot of customers by pricing your product at $497. So, you need to take everything into account before you make your decision, and even after that, you need to test your market and price points to confirm everything.

Good luck.

Yes, you can make $400 more to be exact ($497 - $97 = $400).

When people say to make more money sell higher priced items, what they mean is if your highest price point is $97 then that's all you can ever sell per transaction. If you have a product priced at $497 however then you now have the possibility of making sales of $497.

Ideally a good funnel should have a number of different price points. There will be customers who only want your cheap stuff and there will be customers who want everything you have. So by only having the one price point you are limiting yourself and definitely leaving money on the table.