Of all the things that make a beginner at online business feel like pulling out his hair and banging his head against the wall, the most frustrating is this -

How much should I charge?

You look at it from one angle, and the price you’re thinking of asking seems sky-high and you are CONVINCED no one in their senses will ever think of buying it.

Then, you sleep over it, and decide that you’re selling yourself short by pricing things so low - and want to double, triple or even 10x the price to make it match the value better!

Welcome to the weird, wacky world of pricing.

My very first infoproduct (167 pages of rock-solid content) sold for $5.95. I was terrified about getting hit by many refunds. When that didn’t happen, I gradually raised price - all the way up to $47.00

From that experience, I learned many valuable lessons.

Price is about perception.

If you present your product or service as being worth $7, guess what? That’s all a buyer will perceive it as being worth!

On the other hand, if you take the time and trouble to educate your market about what your product or service can do for them, explain the benefits they will get from their purchase, dimensionalize it and make them come alive in your prospect’s mind, and even compare and contrast these same benefits against what they pay for other products to provide - you’ll easily be able to command (and receive) a price many times higher.

Price is linked to demand - and supply.

If many people want something you are selling, you can price it higher. But if many people are selling the same thing, you have to lower price to be competitive.

That’s the simple law of supply and demand. And while there are ways to work around it, by and large it controls pricing decisions.

Price is defined by expectations.

You don’t find many print books selling at $97 or more in your neighborhood bookstore, though similar ebooks sell online for higher prices!

That’s because people are conditioned to expect a paperback to cost under $20 and a hardcover book to be less than $50. Those expectations need to be countered and overcome before you can breach that barrier.

Price can be backed by education.

If you decide to buck the trend and price your product out of the regular limits, you’ll need to back that by educating your market.

Tell them what makes your product worth the price. Explain what’s different. Offer incentives, remove any risk perception and even over-deliver on the promise so that others will talk about you and build buzz.

Price must always be tested.

No matter how much research goes into your pricing decision, chances are you will not hit your ’sweet spot’ without much testing and tweaking.

Always test your price. See how it impacts sales conversion. Try testing higher and lower price points. You may be surprised at how conversion increases with higher pricing, sometimes.

Pricing is an art and a science. And no one is an expert. Go ahead and be ready to experiment, make mistakes, learn, and revise. In the end, you’ll be leaving fewer dollars on the table!