Pricing Your Products

In our scramble to find a way to offer the lowest prices on the Internet, we often overlook the basic steps that we should be taking BEFORE we even offer a product for sale.

We also overlook something even more important: you don’t HAVE to have the lowest price in order to make great sales. Following are some things I do before and after determining my bottom line. I sell by having products drop-shipped for my sites, which works VERY well, but these steps should be covered no matter your distribution method.

Should you be selling this item now?

Snowboards don’t sell well in the summertime. You may have a hard time moving a pair of roller blades in January. Don’t waste your time and your site space marketing products out of season. Ask your supplier for a little historical information regarding the best time to sell their products. Believe me, to everything, there IS a season. They have the figures. If they don’t want to share this info with you, find another supplier.

Identify your costs

Profit isn’t just the difference between wholesale and retail. You have other costs to consider. Think about every penny you spend in order to get that product to the customer’s door, and plan accordingly. For example, your merchant account probably costs you about 2.2% plus 30 cents per transaction. On an item you’ll sell for $20, that’s 74 cents. Don’t forget that calculation when pricing the item. Are you warehousing the item? How much is that space costing you per item per month? Did you spend money stocking up on shipping materials? How much per unit? What about advertising? Monthly hosting costs? You may need to project some estimated sales in order to arrive at some of these figures.

This may seem very complicated, but it’s really not. Just take the figures one at a time, and you’ll arrive at a wholesale cost plus an amount that, when added together, becomes your initial ESTIMATE of “cost of goods sold”. Identifying all your costs is critical if you want to price your products properly.

Check out the competition

Search on the item you plan to sell. Check out the competitors’ prices. But DON’T get caught up trying to beat the wrong competitor. You need to stay within your “venue”.

My stores are built in Yahoo Shopping (http://store.yahoo.com). 90% of my traffic comes from there. When I seek out my competitors, I look for other businesses like mine ONLY in Yahoo Shopping. Then I compare.

If I’m thinking about selling a product, and I get 1,500 hits in 400 stores on that item in Yahoo Shopping, forget it. If I get a hundred hits in 20 to 40 stores, I’ll look into it further.

So check out the competition, narrow down your product list, make a note of the five lowest prices you find, and then ask yourself another question:

Is anybody going to buy this thing?

This doesn’t have much to do with pricing, but it should be said.

When considering products, there’s unique, and then there’s too unique. Yak Cheese may sound like something that nobody else has for sale on the ‘Net. There’s a reason for that. If you sell more than 3 boxes a year, I’ll EAT some.

Unique is Rain Barrels made in Maine. It’s Exotic Cheeses imported from Italy. Silk Parisian Lingerie. Things you don’t see every day, but would be proud to give as a gift.

Then there’s “common”. Everybody and their grandmothers are selling Alabaster Figurines on the Internet. Do they sell? Sure, in a limited fashion. Do you want to sell them? Not if you want to make any real money.

In my experience, unique products, like Rain Barrels and Parisian Lingerie, DO sell. So do Coleman Sleeping Bags, and Conair Hair Dryers. BRAND NAMES sell. Look at your potential product, and ask yourself honestly if YOU would buy it on the ‘Net.

Set your price

Take the five lowest prices you collected on a product in your list that has survived the above. Calculate your estimated cost, then subtract that from the lowest price. If you don’t see at LEAST 15% profit, don’t bother.

If you do, there are a couple of ways to proceed. You can undercut the lowest price in your “venue” by a bit, and hope to “kick off” the product and get yourself noticed. Chances are, though, that the following week you’ll find that someone has undercut YOUR price by just a bit. That becomes a losing game.

I generally set up a couple of “loss leaders”. These are desirable items (in my general product line) that I sell dirt cheap just to bring in customers. Then I price the rest of my products at the second or third lowest price in my venue. The customers come in for the loss leaders, and then I can market everything else to them via email. I spend a lot of time making my site look better and easier to navigate, and pay a great deal of attention to my customers.

That makes me more reputable in the eyes of the customer. You’ll find that people don’t mind paying just a little more if they feel comfortable in your store. They don’t like to worry that they’re buying from a “hack” who may not deliver. Nothing says “hack” like a cluttered, confusing storefront.

Follow up

After you’ve sold an item for a month or two, revise that “cost of goods sold”. Measuring past performance is just as important as setting the correct price to begin with. If sales drop, recheck your competition. If that’s not it, drop the product, or shelve it until the “season” comes back around. Don’t get sentimental about your products, and NEVER just let your store sit there in limbo once it starts to make money. This is a dynamic business; stay on top of it!

A last word (or three)

Retail pricing on the Internet is so fraught with permutations that it would be impossible to cover everything here, even if I KNEW everything. The steps above are just the basics of a process that works for me. Hopefully something here will strike a chord and work for you as well. Patience and persistence are the keys to a successful Internet business, so hang in there, and don’t quit the day job for at least a couple of weeks. ;o)

I hope this helps in your future marketing decisions.

How to Sell Products Online – The 3 Most Effective and Profitable Selling Techniques

If you have products or items for sale, taking advantage of the internet is one wise move you can make for your business. Indeed, if you want to expand and allow your business to grow, you can check out the many ways on how to sell products online and check out what fits your products.

One good thing about selling online is that wide reach of the internet. If you have a product that is easy and convenient for shipping, then you can actually sell to any parts of the world. If you have a business that caters only to a limited target market, especially those that targets the local populace only, you can still widen your reach and intensify your advertising through the internet.

If you want to learn a few techniques and methods on how to sell products online in the most effective and profitable way, here are a few of them.

1. Go for online auctions. Especially if you sell paintings, antiques, native products, collector’s items, and items that are not commonly found in department stores, online auction sites can be the right place for your products. One popular site you can go to is eBay. Before trying to sell something on these sites, make sure that you have tried buying from auction sites as well so that you will learn a few important thing about buyers in these sites.

2. Create an affiliate program. Another effective way on how to sell products online is through affiliate marketing. If you are not familiar with such technique, it involves affiliates who will be promoting your products online and offline. You will then have to pay these affiliates with a percent commission once a sale of your product is made. One good thing about this arrangement is that you are ensured of a sale before paying an affiliate, unlike paying for online advertising that you are not sure if it has given you results.

3. Post your products in online classified ads. Also another effective way on how to sell products online is to simply post your items in online classified ads. There are popular classified ads online that allows you to post your products for sale and pay a minimal posting fee. You can choose some classified ads that cater only to a specific location, or you can also choose to sell it anywhere in the world, for as long as your product can be shipped without possible damaging it.

These are just three of the many ways to sell online. In fact, you can also create your own website and simply sell on your website. However, it is important to keep in mind too that if you want to sell and market your products by yourself, you have to have a website that is also very visible to a lot of people online.

Also keep in mind that in selling online, it is important to be extra cautious. There are also unscrupulous buyers online who will rob you off your item, so make sure you are also protected online.

Personal Productivity Tips – How to Maximize Personal Productivity

There are thousands of productivity tips and tricks out there, each with varying levels of success and utility.

While these tips can help us shave a couple of minutes off of every hour and make certain processes easier, they often end up holding us up, tricking us into thinking our lives are more optimized than they really are, and betray the true meaning and philosophy behind productivity.

The best way to maximize personal productivity isn’t to invest your time in hundreds of tips and tricks, micro-optimizations and minor changes — it’s to completely overhaul the way you work.

That starts with employing some kind of philosophy to your work. Whether that means dividing your day time between work and personal time, or sectioning off time periods for uber-efficient and focused work, doesn’t matter.

What matters is that those changes produce some kind of measurable output. Invest in the mindset that gets you working hard and measure your output mercilessly. Discard the information that micro-changes can bring you and instead focus on the things that truly matter: behavior and setting.

For some, the best way to maximize personal productivity is by spending their work time in a setting that produces results for them.

For others, setting isn’t a problem, and a greater change to their work behavior and style is required. Whatever the case, these major changes are what introduce huge increases in productivity, not the tiny tips and tricks that only shave second off every minute and fool us into thinking we’re more productive than we really are.

Focus on those big optimizations, ignore the small stuff, and watch your work output massively increase.

There’s a sea of information out there, and the secrets to personal productivity don’t rest in embracing it; they rest in selectively ignoring it.

Sell Products Online – Get The Most Out Of ClickBank’s Subscription Option

The option to sell products online that require a subscription is definitely most advantageous for digital entrepreneurs. Aside from the possibility of offering competitively priced products, adopting a subscription-based approach would also allow one to achieve greater flexibility in terms of providing special offers. While many immediately assume that a subscription-based approach is cumbersome to maintain, it must be pointed out that ClickBank features a fully automated subscription payment system and a convenient means of categorizing products that require recurring payments. However, when opting to sell products online using a subscription model, one needs to use a few simple tricks.

Those who aim to sell products online, taking advantage of a subscription-based approach, should be completely aware of the prices of competing products. To explain, a subscription-based offer is generally assumed to be a cheaper option than full-priced offers. One should never make the mistake of selling a subscription-based product that has a premium price tag. Likewise, finding information about the prices of similar subscription-based products is necessary in gaining a competitive edge. Aiming to offer the lowest price is not necessary though, one only needs to establish a price that justifies the product’s strengths and weaknesses when compared to similar alternatives.

In order to successfully sell products online using ClickBank’s subscription option, using psychological tricks is vital. For example, offering a trial option may be regarded as a means of drawing commitment from potential clients. From a psychological perspective, commitment, or the curiosity-fueled action accomplished by the consumer, is an essential element in laying the foundations for subsequent favorable actions. When an individual opts to try the product regardless of time or feature limitations, a commitment occurs. Interest builds up as the person continues to use the product, thus eventually leading to the ultimate commitment: purchase.

Another way to take advantage of human psychology in one’s aim to sell products online, is to provide free perks. As one may offer different subscription options based on either functionality or duration, it would be ideal to give freebies to consumers depending on their choices. Regardless of the actual value of such freebies, consumers would often perceive additional items as a kind gesture. By nature, people repay kindness so as not to feel indebted. Hence, the result of giving out free items is quite straightforward: consumers feel obliged to maintain the subscription.

Of course, there are other ways to make subscription-based products enticing. Those who cannot come up with fresh ideas to sell products online though, would still gain considerable benefits in opting to use any of the approaches discussed. No matter how often such methods are employed by other digital entrepreneurs, one should never hesitate to follow suit. Adopting the aforementioned approaches still requires careful thinking however, as modifications may be necessary depending on the product that one offers. In essence though, when aiming to sell products online through a subscription-based approach, one needs to thoroughly understand how competitors act and how consumers think in order to make proper marketing decisions.