Developing a smart pricing strategy for your digital products is a key part of running a successful online business. But when you’re a newbie entrepreneur, it may not be at the top of your to-do list like, say, creating those products or promoting your new digital shop.
Pricing your digital products accurately is super important; when you get it right, you meet your target audience’s needs, stand out in your market, and work toward hitting your revenue goals! Wondering how to price your digital products so that they actually sell and bring in that oh-so-lovely passive income? You’ve come to the right place.
Here, I’m covering tips on how to price digital products so they sell like hotcakes.
I’ve said it before when talking about promoting your digital product, and I’ll say it again (and again and again): low prices don’t always equal more sales!
You might think that pricing your digital products low will entice more customers to buy. Especially when you’re a new shop owner. You just want to nab those first few sales, so what’s the harm in setting too-low prices?
I totally get it. When I first started creating digital products, I was actually selling designs on Etsy for like $2 a pop. It was not getting me anywhere fast. Once I started creating my contract templates, though, I sold over $1,000 in a day or two. What does this tell you?
We consumers love a good deal, but the truth is, what we really want is a quality product that’s priced accurately. Now, the prices of your products will vary based on what you’re selling, of course. But here are a couple of tips to help you figure out what’s a good starting price:
People will pay what your digital products are really worth, trust me. Don’t undersell yourself!
Can you guarantee that your customers will actually buy what you’re selling? Sadly, no. I wish. But the closest you can get to doing that is asking your target audience directly what they want…and giving them a product that fulfills their needs as much as possible.
You can send an email survey, post a Facebook poll, or ask for feedback in an Instagram post. However you do it is up to you. But this is a great way to ensure that your product, and its pricing, matches what your target audience wants.
On a similar note, I also recommend pre-selling your digital products if you can! Pre-selling means letting your customers reserve their purchase before you create it. Pre-selling lets you gauge customer interest and build hype for when your products go live. You can also check that your initial pricing is correct during your pre-selling phase.
As your digital shop grows and you add more and more products, your expenses and operating costs increase, too. At some point, you’ll need to raise your prices to match the added time, money, and energy you put into your digital product shop.
I know, I know. Raising your prices can be scary! You might lose loyal customers or scare off new ones. Your new products may not sell as well. But remember, these can happen whether you raise your prices or not. Bumping up your prices ensures that your investment is worth it.
If you’re starting to wonder to yourself, “Should I increase my prices?” it’s likely time. Think about expenses like the following so your new price can cover your costs:
For more examples of expenses you should consider when bumping up your prices, give my November 2021 income report a read!
Here’s an added perk of increasing your prices at the right time. You can drop them back down whenever you host a semi-annual sale!
There’s a lot on your plate when preparing your digital product shop for a big sale, like Black Friday or Cyber Monday. Pricing your products may be the last thing on your mind. But it can make a huge difference in the amount of revenue you bring in.
When prepping your pricing for your semi-annual sale, figure out what discount you’ll offer first. If you’re hosting a sale during a busy sale season (like Black Friday) you’ll want to offer a big enough discount to stand out from the crowd, attract customers, and make it worth their while. A tiny little 10% or 15% off isn’t special enough when others are offering 40% or 50% off.
I share a couple more tips for pricing your digital products to encourage sales during Black Friday and Cyber Monday, but of course you can use them whenever you host your sale!
If there’s one idea I want you to take away from this blog, it’s that pricing is all about value. Price higher than what that worried little voice in your head is telling you to set. If your products are high-quality and what your customers want, then they’ll pay for it! So, set prices that cover your costs and match the value that you’re offering to your audience.
Now that you’re better prepared to set or change your pricing for your digital products, are you ready to start driving traffic (and sales) to your storefront?
I think it’s time to grow your digital product shop so you can start hitting those milestone numbers and accomplishing your goals. My video on growing your digital product shop can help.