Jennifer Tribe

Article Summary:

How to price your information product.

Pricing Your Information Product

Many information marketers, especially those just starting out, tend to charge too little.

It's a double whammy because not only does under-pricing diminish your profit margins, it can also decrease your volume of sales. Yes, you read that right. While you might think rock bottom prices are always popular with consumers, studies show that low prices can actually deter people from buying your product.

Why?

Many consumers believe, whether consciously or unconsciously, that you get what you pay for. To them, a low price signals low quality or value. A higher price can actually confer greater respect for your product and its contents.

OK, but how low is too low? And how high is too high? Here are some tips for setting your prices.

  • Research what your competitors are charging to get a feel for what consumers expect and accept in your market.

  • Consider your target market. Are they small business owners or the presidents of Fortune 500 companies? Each will have different perceptions of value and different cost thresholds.

  • It goes without saying that your prices should cover your hard costs to make and market the product while still leaving you a profit margin. However, don't confuse the hard cost of your product with its value. It might cost you just pennies to sell an electronic report but that doesn't mean you have to sell it for pennies.

  • Time is money. People will pay more if your product is speedier, more convenient or more accessible than a competing product.

  • The more you customize your information for a particular niche market, the more you can charge.

  • The more exclusive your information, the more you can charge.

  • Don't be afraid to test different prices to see which ones work best. It's generally easier to lower prices than to raise them so start with the high end of your test range.
Setting prices that will encourage sales is both an art and a science. Have confidence in your product. Don't be afraid to charge for the value you truly deliver.

Jennifer Tribe is the president of Juiced Consulting, a company that helps business owners turn their expertise into money-making information products like books, special reports, teleclasses, and audiotapes and CDs. Jennifer holds a degree in journalism and has worked extensively as a writer and editor. Her articles on information products have been published in Management Magazine, Home Business Magazine, BusinessWoman Canada, and other leading publications. Subscribe to her free e-zine, Infopreneuring Strategies, at www.juiced consulting.com.

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