We do it every day. When you need to buy gas – you might go to a competitor’s station – even if they only offer gas $0.03 cheaper than your usual stop. When you go to McDonalds, you’re thrilled if they started a new 2 for $2 deal. But what if I came up to you and told you I’d sell you my Jaguar for only $1,000. You’re probably not going to go for it. Why? Because it’s too cheap – there must be something wrong with it. Our instincts are there to protect us.
When you’re selling on the ‘net, structuring your prices depends on what you’re promoting. If it’s a tangible item that someone is purchasing to have you ship to them – such as an Mp3 player – then you have to be competitive with other vendors. If you’re selling services, you have to be competitive as well – but in both cases, you might come up against a foreign competitor who can slash their prices far below yours – so you need to make sure you address that with your potential customers. Your price point must ensure that you profit in the end. That means taking into consideration every single element of investment you have in your ventures. From the domain name to the shipping charges and the time you invest. You want your customers to feel like they’ve gotten a good deal, but at the same that they’ve invested in something worth the money they spent. You also have to take a look at supply and demand. Trends carry a lot of weight with products – both informational and tangible. You might find a great wholesale deal on a shipment of iPods – or decide to write a Survival Guide to the Bird Flu. Look for newsworthy items online and in the paper and target your products around that.
What Is the Fair Market Value of Your Product? It depends on where you’re selling it. If it’s an eBay item, then your customers are going to be bargain-hunting more than your average visitor who arrived at your site through a search engine or ad. Is your inventory new, refurbished, or used? That can affect the price you set. Do you offer a warranty on it? Anything you can do to increase its value means you can charge a bit more. Look at the current competition in the marketplace. If other people are selling something far below what you could sell it for, then find another product. If the market is flooded with too many sellers and not enough buyers – then their prices will plummet and you don’t want to be stuck with excess inventory. However, if the competition is doing a poor job of promoting the products, and you think you have a chance at excelling in that area, then by all means – go for it!
Use additional resources to help you pick a target price point. Invest in some trade magazines, look at catalogues, and see what the manufacturer recommends as the selling price.
For more tips on picking the right price point, check out our website at www.elearn2earn.com.
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