How To Price Your Info Product?

The price that one should put on an information product is a source of worry for many product creators. What is the product worth? Well, the rule of thumb to follow here is that no product on earth – or in cyber space – is worth more than what others are willing to pay for it.

 

The first thing to consider, of course, is how much the product cost you to create. It may have cost you $500 to create the product. Obviously, you aren’t going to be able to sell an ebook for $500. It is important, however, to know what the product did cost you.

 

Next, determine – realistically – how many copies of the product you think you can sell. Divide the cost of creation by that number, and you have a price to start working with. Note that you need to include the cost of marketing into the cost of product creation for a true sense of what creating this product has cost you.

 

Obviously, you need to cover your costs – but you also want to make a profit. Here, it is important to realize that perceived value matters more than actual value. Let’s first look at the actual value of the product.

 

Actual value would be the cost in producing the work. This would include the cost of all outsourcing, the costs of all software used, and of course the cost of your time.

 

Perceived value, however, is a whole different animal. Perceived value is what the customer perceives the value of the product to be. Obviously, if you have followed the advice mentioned earlier and made sure that your product is unique, it has a higher perceived value. If you include bonuses with your product, the value goes even higher.

 

There is no magic pricing formula to use when it comes to pricing digital information products. There have been those who have tried to come up with a formula, but it really isn’t possible – because you are not pricing something that can be touched. You are pricing pixels.

 

For example, if you created a shirt, and had that shirt mass produced, packaged it, and had it shipped to customers, you would be able to pinpoint exactly what the actual value of that product was. It would be the cost of the material, the cost of having the shirt made, the cost of mass producing the shirt, and the cost of packaging the shirt. You would then have a standardized mark-up formula to adhere to in order to place a price on the shirt.

 

But what are pixels worth exactly? In the grand scheme of things, a pixel isn’t actually ‘worth’ anything. They just ‘are.’ So, how do you put a price on your digital product?

 

Start by looking to see what others are charging for similar digital products. Even if your product is unique, your price will most likely work well within this range of prices, or slightly above this range of prices if you have truly created something unique. This is the best rule of thumb to follow, because it fits in well with the first rule – the product is only worth what someone else is willing to pay for it.

 

Here, we come back to quantity. Obviously the longer your product is, the more you can reasonably charge for it. However, the quality that we discussed earlier must also exist. Also note that different product types have different price ranges. For example, videos are often higher priced than ebooks. Ebooks are higher priced than reports.

 

Overall, teleseminars, which may be free to participants, are the highest priced of all, in most cases, when they are sold as recordings with transcripts to those who did not participate. Teleseminar series, however, often do have a fee associated with them, and last anywhere from four to eight weeks. These are also much higher priced than other types of information products.

 

Again, do some research and find products that are similar to yours – in terms of information, quality of information, quantity of information, and the format in which the content is being presented, and this will help you to set your price for your own product.

 

Put a dollar value on the bonuses that you will be giving away to customers when they make a purchase. While this does not figure directly into the price of the product, they can significantly raise your asking price. The important thing to remember here is that a product is a product, and a bonus is a bonus. People expect bonuses to be free.

 

So, if you are adding the value of a bonus into the price of your product, you need to add that bonus as a part of the product, and not refer to it as a bonus. This is where and how the product price can increase. Remember that bonuses are free, and are not figured into the price of the product.

 

You can also take your cue from many other successful marketers, and ask your opt-in list members how much they would be willing to pay for the product that you have. Give them a fair description, including the quality and quantity of the information, along with different prices and see which one people would be most willing to pay. Be sure to offer some sort of free gift for their time and trouble.