Ready to learn the art of pricing digital products? Whether you’re a seasoned creator or just starting out in the online business world, pricing your digital products effectively is crucial for success. <\/p>\n\n\n\n
With the growing demand for digital goods such as ebooks<\/a>, online courses<\/a>, templates, and more, understanding how to price your digital products can either make or break your business.<\/p>\n\n\n\n Like other creators, you want to set an ideal price for your product that doesn\u2019t scare your audience away but at the same time doesn\u2019t discredit the value of your product.<\/p>\n\n\n\n But you’re not entirely sure what that looks like. <\/p>\n\n\n\n Not to worry, in this article, we will show you how to price your digital products and find the sweet spot between your price and your customers. <\/p>\n\n\n\n If you\u2019re ready to go premium, here are some guidelines for pricing your online digital products better.<\/p>\n\n\n\n Understand who your target audience<\/a> is, what their needs are, and what they’re willing to pay for your product. This information will help you set a price that meets their expectations and maximizes your revenue. <\/p>\n\n\n\n Rather than asking “How much can I sell my digital product? you ask questions like “How much do I want to make from my product?”<\/p>\n\n\n\n This gives you an overview of the likely amount your product should be and what you need to get there. For example, let’s assume your goal is to earn \u20a610,000,000 ($20,000) from selling your product.<\/p>\n\n\n\n To reach \u20a610m ($20,000) in sales ask,<\/p>\n\n\n\n Let’s look at some pricing scenarios that explain this better. <\/p>\n\n\n\n Let’s assume you set your price at \u20a61000 ($2).<\/p>\n\n\n\n Right away, we can tell that with a price of \u20a61000, you\u2019d need to sell 10,000 copies of your ebook to reach your goal of \u20a610m. And to get 10,000 people to buy your product, you need to market to 100,000 people. <\/p>\n\n\n\n Let’s also consider that you’ll need to run ads to reach 100,000 people, which is a huge business expense that should be factored into your pricing. <\/p>\n\n\n\n And the time it’ll take you to reach 100,000 people. <\/p>\n\n\n\n With this, we can see that the price of \u20a61000 ($2) may not entirely be feasible. <\/p>\n\n\n\n Here, we\u2019ll experiment with a higher price. So, let\u2019s increase the price of the product to, \u20a650,000 ($100).<\/p>\n\n\n\n At this price, we\u2019d need 200 sales to reach our goal of \u20a610m.<\/p>\n\n\n\n Now that sounds better, but we still need to think of our conversion rate as well as our reach.<\/p>\n\n\n\n Research<\/a> shows that across most industries, the average landing page conversion rate for a product around that price is about 2.35%.<\/p>\n\n\n\n This means; to sell 200 copies of your \u20a650,000 product at a 2.35% conversion rate, you\u2019ll need to reach approximately 8510 people.<\/p>\n\n\n\n Do you see what happened there?<\/p>\n\n\n\n Your audience reach has gone down dramatically from 100,000 people to 8510 people.<\/p>\n\n\n\n And right away, it feels less daunting to do the work required to reach 8510 people versus 200,000!<\/p>\n\n\n\n Now you see that this pricing seems fair enough for your product, depending on what it is. <\/p>\n\n\n\n Now, let\u2019s consider a third price point. This time, we\u2019ll just raise the number all the way up to, \u20a61 million.<\/p>\n\n\n\n What happens if you decide to sell the product at \u20a61 million?<\/p>\n\n\n\n Right away, you can see that you only need to sell to 10 people to reach the \u20a610m goal. But convincing someone to give you \u20a61 million is going to take a lot of work.<\/p>\n\n\n\n Also, at this price point, your conversion rate will experience a big drop. So, let\u2019s assume that your conversion rate drops again – this time to 0.1% (which is 1 in 1000 people).<\/p>\n\n\n\n This means to sell 10 copies of your \u20a61 million product at a 0.1% conversion rate, you\u2019ll need to reach 10,000 people.<\/p>\n\n\n\n Clearly, you\u2019ll see that even though we\u2019ve bumped up the price 20X from 50,000 to \u20a61 million, the number of people we need to reach isn\u2019t 20X more.<\/p>\n\n\n\n So, it still holds true that as you increase your price, you need to reach fewer people to hit your goal.<\/p>\n\n\n\n But with charging a steep price comes a problem – which takes us to the next scenario.<\/p>\n\n\n\n Here’s the thing. If you\u2019re selling a product for \u20a61000, then it doesn’t require a lot of production. <\/p>\n\n\n\n For example, if you buy an e-book for \u20a61000 and it’s not very well formatted, but it contains like one or two really good tips – you\u2019ll probably still be a happy customer, right?<\/p>\n\n\n\n Now, if you buy something for \u20a650,000 though, your expectations rise. This time, you want to see better production quality. You want to see something more unique, something more valuable.<\/p>\n\n\n\n But if what you see is just a crappy-looking PDF with one or two good tips, you’re most likely not going to be a happy customer.<\/p>\n\n\n\n So this just means that in production, as the price goes up, the effort it takes to deliver a product that will make people happy suddenly increases.<\/p>\n\n\n\n That is putting together an offer that justifies a price such as \u20a61 million will have more logistics requirements (aka more work).<\/p>\n\n\n\n So while selling at a premium price can be very beneficial and profitable, it\u2019s not very solopreneur-friendly, and certainly not advisable if this is your first online course.<\/p>\n\n\n\n To price confidently, your product itself needs to be structured and packaged in a way that clearly communicates value. Here\u2019s a step-by-step guide on how to create and sell digital products effectively<\/a>.<\/p>\n\n\n\n Learn the art of pricing. Read this guide on <\/strong>How to Price Your Online Course to Make More Sales<\/strong><\/a><\/p>\n\n\n\n The price of your digital product is directly proportional to the value contained in it. If your product will help your audience become better at what they do, say it. If it\u2019d save them time on a regular routine, say it. It\u2019d help them 5X their income, say it.<\/p>\n\n\n\n We’ve had cases of customers requesting a refund because they felt unsatisfied with the product they got from a merchant. Oftentimes, they believe they didn’t get as much value as they’d have hoped. <\/p>\n\n\n\n And on top of all that, the product was a bit pricy. <\/p>\n\n\n\n You do not want to be in this situation. <\/p>\n\n\n\n Hence, it’s important to quantify the value of your product. This way you can easily set a price that justifies your product and the time taken to create it. <\/p>\n\n\n\n If your customer sees the price of your product, will they want to check out other alternatives because they feel your product is “unnecessarily pricy?”<\/p>\n\n\n\n Of course, your product isn\u2019t the first of its kind. The only reason it differs from the rest in the market is because of you, the angle of your content, and your experience.<\/p>\n\n\n\n Compare the price of other alternatives to your product and use that as a guide to set your product price. These options are probably lacking in places your product covers up. <\/p>\n\n\n\n If this is so, then it\u2019s good. Because when your students want to make a purchasing decision, they weigh their options.<\/p>\n\n\n\n Besides, who will see diamonds and go for copper?<\/p>\n\n\n\n Another huge factor in pricing your digital products is to think about your authority in the market. <\/p>\n\n\n\n Is your name or brand name easily recognizable to your target audience? Are you well-known for the skills you teach? Have you spent several years building your platform and growing your audience?<\/p>\n\n\n\n If you\u2019re not yet perceived as an expert in your field, you may want to consider first giving out free content<\/a> to build authority in the market before releasing a paid product. <\/p>\n\n\n\n However, if you’re an already established authority in your market, you want to keep the prices of your products balanced to serve both your premium and regular customers. <\/p>\n\n\n\n We can agree that successfully selling your digital product boils down to a few things:<\/p>\n\n\n\n But beyond all these, we\u2019ve realized that creating a successful digital product is more about what you sell and how you sell it.<\/p>\n\n\n\nHow to Price Your Digital Products<\/h2>\n\n\n\n
1. Research<\/h3>\n\n\n\n
2. Ask the right questions<\/h3>\n\n\n\n
Pricing scenario 1<\/h4>\n\n\n\n
Pricing scenario 2<\/h4>\n\n\n\n
Pricing scenario 3<\/strong><\/h4>\n\n\n\n
Pricing scenario 4<\/strong><\/h4>\n\n\n\n
3. Quantify the value of your product<\/h4>\n\n\n\n
4. Consider your alternatives<\/h3>\n\n\n\n
5. Consider your authority in the market<\/h3>\n\n\n\n
Things to Not Do When Pricing Your Digital Product<\/h2>\n\n\n\n
Conclusion<\/strong><\/h2>\n\n\n\n