Product Pricing Strategy – How To Price Products & Services For Your Online Business
How you price your products and services for your online business can be instrumental as to whether your online business succeeds or fails, so you have to get it right.
The main two things it will effect is the demand for your product and it’s overall perceived value in the eyes of the home business consumer.
So in order to create a profitable online business you must be very aware about how you are going to offer your products and services to the marketplace. Many online business owners fail to see the significance in creating a product pricing strategy and this can lead to low profit margins which may ultimately be the deciding factor as to why their home business fails.
To ensure that your business has a regular cash flow I would like to offer to share with you some product pricing strategies which you can implement into your online business.
Product Pricing Strategy – 3 Tips On How to Price Your Online Products & Services Correctly
Product Pricing Strategy – Research Your Competitors
The first step is to look at your leading competitors to see what they are charging for their products. Look at the top three and then price your products and services in relation to theirs in a way that is competitive.
By doing this it will help you to decide if you want to position your brand at the luxury end, meaning the more expensive, or the more economic end, meaning the less expensive. When you are deciding this you need to be aware of a couple of things.
The first is if you decide to be at the luxury end, you don’t want to go over the top too much and price yourself out of the market so your potential customers don’t even give you a look.
The second thing to be aware of is that you don’t want to go straight in and drastically undercut your competitors because you will be reducing your profit margins which could effect the viability of your home business.
Product Pricing Strategy – How You End Your Pricing
The internet marketing world is notorious for products that end with a seven. For example $47, $97 or $197 is very common for digital products such as e-books and video courses.
If your online business is geared more for e-commerce and retail then maybe end with a 99 or 95. For example $19.99 or $19.95 instead of $20.00. Although the difference is only $0.01 or $0.05 subconsciously for the consumer they think they are getting a bargain. These types of product pricing policies are the norm but it doesn’t mean you have to follow suit. Test different price endings to your competitors as this will make you stand out from your competition and could give you a slight edge.
Product Pricing Strategy – Contextual Pricing
This has everything to do with the perceived value that the consumer has for your products and services. Really this only effects you if you are going to position yourself at the top end and become a premium supplier. A customer will only be willing to part with their hard earned money if you make sure you stand out from your competitors and go that extra mile for them.
This could be how you package up your products or how you design your website. Professional packaging and website design will make the consumer think they are dealing with an elite brand and they are prepared to pay more. Or if your business model is offering exotic retreats look at how you can offer extra features so that the customer comes away with the best experience possible. Look at your competition and offer that extra bit more.
When you are looking at your product pricing strategy make sure you think about the 3 elements that I have shared with you in this post.
I wish you every success in running your home business and profiting from your product pricing strategy.
Business Website: Nice Money Publications.com
Main Blog: Latest Home Business Blogs