Without a doubt the price of your product has the biggest impact on your sales, however, there’s a sweet spot to find.
In this article, you’ll learn how to find your optimal price points on Amazon.
Key Considerations On Finding Your Optimal Price Points
Pricing will instantly position your product in the mind of your prospect, so if you’re selling something for a couple of bucks, then people will assume it can’t have that much value.
If however, you were selling it at a much higher price then people will think it’s something special. For example, if you’re selling a paperclip for 20c, people will think it’s just a regular paper clip.
If however, you were selling a paperclip for $100, and you were saying it was built with reinforced gold plated titanium, then it would have a much higher perceived value and some people would be willing to pay for that.
So the price is a great way of getting the perception of high quality and often times when we’re searching for something, we don’t want to buy something if it’s the cheapest because sometimes the cheapest might be the lowest quality, so we might look for something deliberately that’s a little bit higher priced.
Bear in mind higher price will always result in a higher perceived quality but you need to be a little bit careful here because it will also result in higher expectations.
How To Manage Customer Expectations
On Amazon higher expectations can be something that you have to be a little bit careful with because if someone pays a premium price for something, even if it’s a low price for example lets say someone has spent $30 to get something that everyone else is selling for $10, then they’re going to expect something really good, and if they don’t get it, they could leave you a one star review so please bear that in mind.
Always aim for premium pricing, it’s OK to start low initially, for example one of the strategies we use is to start off by pricing the product at cost price, which you can do if you don’t get momentum, drop your price on Amazon to the cost that it’s costing you, i.e., your cost price, and this can sometimes help stimulate momentum and then you can start increasing the price by a few dollars every couple of days.
Make sure you leverage the ‘regular price’ and ‘sale price’ option as per the screenshot below, so you see the regular price, the sale price, so it shows that the customer is getting a large saving, in this case 81% 🙂
TIP: Always aim for premium pricing, if you’re going to start with a low price, keep in mind that you should be selling it at a premium otherwise you could end up in a price war!
Why Competition Analysis Is Important
Do some competition analysis, find out how your competitors are priced.
Are any of your competitors products VERY similar to yours or even identical? If they are it’s going to make it a little bit more complicated because the consumer is going to be aware of that, and why would they spend more for your product unless you’ve got something else that you can offer them.
If your competitors products are similar or identical, one way around this is try to make it look different by having different photographs for example.
Check to see if there are clear pricing segments in your niche or marketplace. For example are there a bunch of people selling at $15, and another group selling at $23? If that’s the case, then you might want to sell yours for $19.95 because that’s in the middle of these two values.
TIP: Try to have different products that no one can copy
Be Realistic!
Crappy photos will NEVER command a high price, you need to get your photos right, and you need to get your whole listing looking professional.
If other people are selling the same identical product, then you can’t expect to command a higher price unless you offer something else, like maybe you’re selling a yoga mat for example and you’re also offering a yoga DVD. In this case the yoga mat maybe the same as someone else is selling, but you’ve differentiated yourself by adding the yoga DVD.
High prices will set your customer expectations, so if you’re selling at a higher price make sure your product is actually worth that because otherwise you may end up setting yourself up to receive negative reviews.
Test & Tweak To See What Works
Like all parts of your listing, you can test and tweak your price to see what works.
Sometimes by increasing your price will increase your conversion rate because all of a sudden you’re perceived as a higher quality product. We’ve seen this over and over again so don’t be afraid to change your price.
For further reading on split testing, please visit the following article:
The Ultimate Guide To Split Testing Your Product Listing On Amazon
Bear in mind the price of the market can change throughout the year. So you need to adjust your prices so stay where you want to be in your marketplace.
TIP: Keep an eye on your competitors and your performance, as price directly impacts your conversion rate
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Tehmina Zamir is a Content Manager at Blackbird Suite. With 5+ years experience in the multiple-niche industry, she writes action driven marketing sales copy to help millions of Amazon sellers grow their business at a rapid rate. She is also an author of Global Patient Transfer, Gooline Space, Healthwiz360 etc.