There are more entrepreneurs selling their products for lower prices in order to get a higher volume of sales. I am one of these entrepreneurs, and none of my books are over $2.99. Lowering prices will result in a higher volume of sales. You’ll get noticed more because people won’t have to spend as much money to get access to your product.
However, cheap doesn’t mean better. If the product shouldn’t be sold in the first place, it will get refunded even if it’s only $0.99. Not all products can be refunded, and the consumers aren’t going to be happy if they can’t refund a product they don’t want anymore. When these people use word of mouth to talk about you, they won’t be talking about you with praise.
The question of underpricing is a question rooted in the minds of all entrepreneurs. The question comes up every once in a while. The thought of getting more sales entices entrepreneurs to lower their prices. Having 10 people buy a $2 product is better than having 1 person buy a $15 product. This is why entrepreneurs lower their prices.
I am a big believer in low prices to get a high volume of sales. However, if you do go for inexpensive products, are you selling products that are worth their price tag, or are you selling them something that could have been worth more? Is your product worth more than you’re selling it for, or are you selling inexpensive but sub par products?
There are inexpensive options that could have been given more expensive price tags. However, those entrepreneurs choose not to raise the price of their products. Quality products for a low price are going to sell more than low quality products with low prices.
Good post Marc. Prime example in the commercial printing industry. One of the factors in the reduction of U.S. printing plants started about 15 years ago when companies started lowering their prices to be more competitive,.57,000 printing companies became 25,000. Reminder to look at your original business plan and why you’re in business to stay in business.
I sometimes get put off by a product that is cheap, especially if I am looking for quality, there is an element of giving it a go with cheap products but for something of quality I’d skip a 99p product over one that costs £5.