Selling your product for 15x the production cost might sound appealing, but you’ll never make any money if no one’s willing to buy.
And trust us, no one is going to spend $75 on staples no matter how much they cost to make. Here are five things to consider when pricing your products online:
1. Know your customer. Just because a product cost $10 to make doesn’t necessarily mean you should charge $20 for it. Instead, consider what your customer is willing to pay. Not sure? Conduct surveys or focus groups to learn more about your target market’s expectations, shopping behavior, and values.
2. Stay competitive. Part of understanding pricing is knowing how you stack up against the competition. Does your competitor offer better quality products? Are the prices higher or lower? And finally, does your customer care?
3. Bundle products. If you can bundle multiple products together, it incentivizes the customer to purchase more for a better deal. It’s a win-win for both sides.
4. Adjust accordingly. Customers have different shopping behaviors at different times of the year. Which products are purchased more during what time of the year? When do your sales usually lag and then pick up again? Collect that data over time to understand what and when your customers are willing to spend.
Show your value. Operating in a saturated market? Join the club. If you’re not showing your customers the value your product or service brings to their lives, they’ll go elsewhere.