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Selling items online and how you should price them
When you're selling something online it's always hard to figure out an exact price of what you should list your items at. It's hard because there is so much competition out there trying to fight for the sales that if you price your items too low you won't make money and if you price it too high you won't make a sale. Getting that sweet spot is what you're targeting and it's not always easy. People selling something they made themselves have it even harder because you can't really compare your brand to something another person made because there are so many variables.
Research Research Research.
Whenever I'm planning on making something I always do research on my competitors prior to diving in. Soon I'll be having another physical product coming out and before I started making them I did my competitor research for around 3 months. You'll need to figure out various things about your competitors as well as your own system.
A few things you need to research
- Are your competitors a major company or a mom and pop shop.
- Do your competitors pay for ads on Adwords, BingAds or facebook ads.
- Are your competitors paying websites to have their banners placed on all the pages.
- Can you increase the quality of the competitors item.
- Can you get high quality material for a cheap amount by purchasing in bulk (if you need material).
- Can you purchase something you're already making, but for cheaper and then rebrand the item and sell it.
The above points will help you identify if you have a competitive market, if it's worth it to get into the niche, if you can invest a little bit of money to produce one item at a time or if it's easier to just buy a premade item and rebrand it. These are some simple bullet points that I go over anytime I plan on making a product and selling it online.
How to price an item
After you get an idea of what you should be pricing an item, you now have to get in the minds of your buyers and figure out what will work best. Some people swear on charging $XX.99 for their items but I've seen a log of people doing $XX.97 or $XX.95 and even $XX.93. I personally like selling everything for $XX.95 because I just like that number better, but you can play around with this and figure out exactly what works best for your audience. Now the only downside about this is that you'll need loads of data because you could have a good week in sales when at $XX.99 and a bad week when at $XX.97 but it could just be because of the amount of traffic you were getting. What you would need to do is focus on the conversion rates, if your traffic is steady everyday then it's easier to track, but that's not always the case. If you're converting at 5% when at $XX.99 but converting at 7% when at $XX.95 then obviously the $XX.95 would be better. If you focus on how many sales you're getting when at a specific number then you won't get the best one and you could just be leaving money on the table.
In conclusion, you need to do your research prior to launching to ensure you're in a good niche. If you don't do your research then you might be disappointed when the sales don't start rolling in. You'll need to price your items the right way to increase your conversions and it takes time to do this right, so be patient.
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