SOWPub Small Business Forums

SOWPub Small Business Forums (http://www.sowpub.com/forum/index.php)
-   Original SOWPub Forum Archive (http://www.sowpub.com/forum/forumdisplay.php?f=3)
-   -   Items costing $200+ are assumably have lower conversion ratio than low ticket items $50-100? (http://www.sowpub.com/forum/showthread.php?t=5059)

Andras Nagy August 11, 2003 01:27 PM

Items costing $200+ are assumably have lower conversion ratio than low ticket items $50-100?
 
Items costing $200+ are assumably have lower conversion ratio than low ticket items $50-100?
Anyone have a guideline or a url pointing to one?


Make a $100 the easy way......

Michael Ross (Aust, Qld) August 11, 2003 04:26 PM

According to the extensive price testing done by
 
Ben Suarez and reveal in 7 Steps to Freedom...

The total amount of money to be made from a project is pretty well set. Changing the price does not change the total money made... only the number of customers who will buy.

For instance: Sell a widget for $10 and you might get 1,000 sales - a total of $10,000. Sell that widget for $20 and you will only get 500 sales - a total of $10,000. Sell that widget for $5 and you will get 2,000 sales - a total of $10,000.

That being the case, you need to then weigh in your marketing costs to get each customer and wat you figure to be each customer's life time value. If you can afford to get more customers at the cheaper sale price, then it might pay you to do so because you will have more customers to sell stuff to later on.

It really depends on how many customers you want to deal with. Pick that. How much you want to make. Divide the two together to get your sale price.

Michael Ross

Garry Boyd August 12, 2003 07:31 AM

Hang on a minute...
 
Havent seen that theory before, its kinda interesting, but I have a few problems with it.
Now where does marketing fit in that? Market poorly and you will not reach the potential market. Market aggresively and you will sell the total market and a little extra. I can see its application to info products, but then you move on to widgets. Lets call the widget coca cola.
A litre of coke can cost from say $1 in the supermarket to $10+ in nightclub. The supermarket will move huge volumes at low cost, and low profit, while the nightclub will move low volumes at high overhead and high profit. Take an almost identical widget, say Pepsi, and the numbers you get out the end will be radically different.
Other factors that need to be considered are:
Cost of goods
overhead
supply chain costs
product perception
competition
costs of future service
and a whole raft of others.
> Ben Suarez and reveal in 7 Steps to
> Freedom...

> The total amount of money to be made from a
> project is pretty well set. Changing the
> price does not change the total money
> made... only the number of customers who
> will buy.

> For instance: Sell a widget for $10 and you
> might get 1,000 sales - a total of $10,000.
> Sell that widget for $20 and you will only
> get 500 sales - a total of $10,000. Sell
> that widget for $5 and you will get 2,000
> sales - a total of $10,000.

> That being the case, you need to then weigh
> in your marketing costs to get each customer
> and wat you figure to be each customer's
> life time value. If you can afford to get
> more customers at the cheaper sale price,
> then it might pay you to do so because you
> will have more customers to sell stuff to
> later on.

> It really depends on how many customers you
> want to deal with. Pick that. How much you
> want to make. Divide the two together to get
> your sale price.

> Michael Ross




Weather instruments online

Michael Ross (Aust, Qld) August 12, 2003 05:05 PM

Oops... I let go...
 
Seeing as Ben Suarez is a mailorder guy, I suspect his results are based on mailorder testing - space ads and direct mail pieces. And are based on price testing - where the sales copy stays the same but only the price changes.

Items sold via retail outlets (like Coke) would be a different kettle of fish.

Michael Ross

Garry Boyd August 12, 2003 07:45 PM

Re: Oops... I let go...
 
I agree, it was when you mentioned widgets my radar perked up. Just curious, do they have a formula for judging what the market saturation value is for a product before they launch? ie, can you determine the final value of an info product about "rearing goldfish for profit" against "start a telephone sanitising business" ?
> Seeing as Ben Suarez is a mailorder guy, I
> suspect his results are based on mailorder
> testing - space ads and direct mail pieces.
> And are based on price testing - where the
> sales copy stays the same but only the price
> changes.

> Items sold via retail outlets (like Coke)
> would be a different kettle of fish.

> Michael Ross


All times are GMT -4. The time now is 03:03 AM.

Powered by vBulletin Version 3.6.0
Copyright ©2000 - 2025, Jelsoft Enterprises Ltd.