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Retail Pricing Strategies - Set the Right Price
The prices for information products are largely determined by the product owner. Deciding the price for a information product is far more easy than deciding the pricing for a book on the shelf at a major retailer. Print Books have to set more prices as they have to pay to the author, printing, marketing, publisher and retailer.
Information products only pay the owner and affiliate sales. No inventory to store, no big upfront costs and if it does not sell, just transfer it to an archive file or hit the delete key. When you consider all of those factors, the information product owner has freedom to set the prices with one exception - what will the market pay?
That is the slippery part. Ebooks are well established in every genre from textbooks to popular topics so the price is dependent on the market and the following of the author. Let us say you are starting out and lack that major following, how do you price your product?
Start by surveying the prices on comparable information products on at least a dozen sites or vendors. Have you noticed that many information products end in "7?" Famous pricing structure are $17, $27, $47.
This price is considered to have many clicks. Other frequently used price points are $9.95, $19.95, $39.95. The ".95" is just a retailers trick of making the price sound less than it really is.
After all, $19.95 is not a full twenty bucks since buyers tend to ignore the influence of retail tax or shipping. With information products delivered electronically, the $19.95 is the true price, leaving a big nickel for whatever a nickel still buys.
It is not the nickel - it the psychological satisfaction of spending less than 20$. While buying a 17$ product buyer has the thinking of spending less than 20$ in their mind.While deciding the cost of your product look for the ground in pricing.
Do not keep the price of your product too low or your product will not been seen as worthwhile. Even if you start slightly higher than comparable, you have room for a price reduction or a "special offer" at the next lowest price point.
Many product owners give you heavy discounts so the products cost get reduced to 1/3 of the original cost in the end. The buyer gets excited about getting a discount when the product was never going to sell at the inflated price in the first place. Let the buyer win the deal.
Price only matters as part of the equation. Do not let your buyers to focus on the cost of product. Keep them focused on the product and the pleasure of the purchase and they will be willing to pay based on the sensed value and not the dollar amount you put on your product.
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