If you’re a small business owner, or just someone looking to make some money on the side, the price of your products is more important than ever. There are so many people selling so much stuff, that it can be hard to know where to turn. Who to turn to for advice. Now, while I might not be the know-all of the online selling gig, I have learnt a couple of things on my own selling journey.
I’ve been selling online for nearly two years now (read me rant about it here), had over 150+ customers and made an adequate amount of money in the process. The market that I try to target, is those who are interested in reading young adult books. As a result of my own interest in them, I bring a sense of realness to my buyers and can empathise with them on matters of produce. But we all know that it isn’t just customer relations that help you to sell your product. Here are some tips to make customers want to buy from you from your price alone.
How Readily Available is Your Product?
Example Used: Sad Girls by Lang Leav
This is an area that so many online sellers go wrong. So often I see people trying to sell their goods at the same price as the big mainstream stores, and so often do I see that same product sitting still on the market. If the product is easy to buy, nobody wants to get it from an unknown online seller when they can easily pop down to their local Waterstones / Waitrose / etc and get their stuff there. Online sellers aren’t as easy to trust.
Let’s take the book Sad Girls by Lang Leav for an example. I’ve seen it being priced at $30 online, and it’s selling for $31 in Kinokuniya (which is the big bookstore where I live). Weighing up the pros and cons, buyers will come to this conclusion. If they buy it at the bookstore they get:
- To check the condition themselves
- The benefit of ongoing sales
- Someone that will be held accountable if something goes wrong
- Less risk of the book getting lost in the mail
- Reassurance in the idea that the store is a big brand, and trusted by many
Very few people are going to buy that book from the online seller. It doesn’t matter if the condition is brilliant, the condition in the branded store will be just as good. If your buyers can get the same exact thing from somewhere else and you’re not that well known as a seller, drop the price. I would say the minimum price drop would be 10% depending on your market.
Is Your Product In Good Condition?
Example Used: iPhone 6
Every dent, scratch or defect will lower the value of your product. If you’re selling an iPhone 6, take a look at all of the other buyers who are also selling iPhone 6’s. Maybe there are 5+ sellers who are selling brand new phones for $300, but your phone has two dents and the screen is scratched. Please don’t think that just because it’s the same product, you can price your phone at $300 too.
Buyers are going to be looking for the best deal. If you’re selling an iPhone for $300, they’re going to be looking at all of the other iPhones that are selling for $300. They aren’t going to be picking the one that has a couple of defects, over a phone that looks brand new. Unless you have some extras to throw in, lower your price.
Check Your Competition’s Prices
On that note, it would be wise to have a look at the other people who are in your market. How are the more successful people pricing their products? Have they always priced it in the same way? What prices did they set when they first started out? Obviously, there is more to sales than just the pricing, but it’s a good place to start in terms of attracting buyers.
Seeing what other people are pricing their goods at, gives you a good idea of how much people are willing to pay for your product. For example, if none of the big online sellers are pricing their product over $200, then you know that going any higher would be risky for your business.
Find A Price Good Balance
Example: £1 shops
I know that I’ve been quite adamant in my previous points about dropping the price, but there is such a thing as dropping it too low. Afterall, you don’t create profit by just making the customers happy. You need to find a balance.
When you price your product too low, you are telling your customers that what you’re selling isn’t worth very much. Don’t fall into the trap of thinking that extremely low prices = more customers. Let’s take the £1 shop for example. Most people don’t go into there expecting quality products, but rather they go for cheap and convenient products. If you want to build up a brand that is respected but also convenient and cheap, pricing too low isn’t the way to go.
A great deal of the products in the £1 shop are good quality. You can find the same books in there, as you can find in Waterstones. The only difference is, when buyers go into Waterstones they feel as though they are getting more of their money’s worth. This is what you should be aiming towards in your business.
What are your tips on pricing goods? What do you think of my points?