How Much Should You Sell A Product For? This story shows theres no one "RIGHT" price!

I try to always see "what the competition is charging".

What are people ACTUALLY PAYING for a "similar service or product". Would they pay more if I added something of value to the service or product? Or simply, modified the product or service so as to make it "WORTH MORE" to the end users?

Ex 1) Before the internet, I sold some reports via mailorder. One was a 50 page Report "The Mortgage Minder System"...which showed homeowners how they could cut 10 years off their mortgage by paying their mortgage twice a month (26 payments a year) instead of once a month. Another seller of a similar report had already proved that his report would sell successfully for $49. So, even though I added some extra info to MY report...I felt there was "enough profit to make it worth my while" to keep my price at $49 and I did very well with it.

Ex2) Some guy was selling ad spaces on a "Daily Special Board" for $295 a year. I modified my Board, made the spaces larger and charged $590 a year and sold out each Board whenever I installed one.

Ex3) Another guy was selling ads on TV Channel Guides placed in hotel rooms for $195 a year. I modified my version, made it larger and found the "best price" for MY product was $390/year.

Ex4) A software program for "Determining The Value of a Business" was selling for $495. It had, in my opinion, too much "Accounting Lingo" and charts and database files that took a CPA to understand. I thought if I could put together something "simple" where all the owner of a biz had to do was plug in numbers from his Profit & Loss Statement and Balance Sheet...he could find out IN MINUTES....an "approx value of his business". So, after a few "test" mailings I discovered the RIGHT PRICE...a price that would bring the most "profit" was $149.

Ex5) A guy was selling ad spaces on 20,000 paper placemats for $165 ea. I made up some sample Full Color PHOTO ads....put them on a "placemat sized paper" and LAMINATED them....and got $495each....and promised a Full Year coverage instead of just 20,000. And...I only had to make up 360 of them for a 120 seat restaurant.

Ex6) Knowing how important "Telephone/Address Books" are to the ladies in my family...I created one that had ADS and Discount Coupons of local businesses and Important Info about a Town that would be of MUCH INTEREST to a Newcomer. I found the local "Welcome Lady" was charging each sponsor $4 per Newcomer...I felt I could get $2 per sponsor as long as I kept the TOTAL contacted each month around 100 contacts. And, I found I could charge $4 per contact if the book was going to New Business Owners AND...provided I kept the TOTAL billing to $200 or less each month.

So....by researching and finding what similar products and services are successfully selling for....and by my changing the appearance or function or whatever....to INCREASE THE VALUE of my product or service....I could use the other products or services "as a STARTING POINT" for pricing my stuff.

The Major benefit to this internet thing is the competitive research can be done a lot faster now. Sometimes just googling a certain Keyword can bring up many existing products or services....within minutes.

Granted, most of the products and services I've marketed were relatively simple....however....I think the same thinking can be applied to even more complex products or services.

I learned long ago (with my Burglar Alarm biz) there are 2 ways of presenting prices;
1) Start with a High Price and remove stuff
or
2) Start with a Low Price and Add stuff.

#2 has always won.

With a product I'm presently working with, I START with 1 Hotel for $x and if they'd like a 2nd Hotel for $x+....which is very little extra....they opt for the extra Hotel. As compared to showing the price of BOTH Hotels at first and offering to deduct $x for the 2nd Hotel.

It's like the larger price "scares them" and they can't get their mind back to "rational thinking". Whereas a lower initial price tends not to "scare them OFF" and they can "logically" see the VALUE of having the 2nd Hotel for "only a little bit more".

If you've ever bought anything off the "Infomercials" where you call to place your order....you will be given a "pitch" for an additional item or items.

Psychology is truly in the "pricing" of any product or service.

Ebooks, those that can be instantly downloaded, sell for less than Physical sheets of paper MAILED.

Don Alm
http://www.donalm.com
Some of My Unique Programs