I created my first infoproduct, an ebook showing people step by step how to use Twitter for business, in 2009. I was completely new to the world of infoproducts, and had no idea how to price my product. I was fortunate enough to be chatting with several very successful internet marketers, so I hit them up for advice.  These are people who make in the six figures every year selling software and infoproducts, and they are very deliberate in everything they do, including their pricing strategy.  So here was the advice that I got: Price low – seven bucks or less! And – price high – create a big product and charge several hundred dollars or more! And the frustrating thing was – the people who were giving me this very different advice were telling me what had worked for THEM, but what worked for each person was very different.

Arguments for pricing low: this economy is terrible, people are spending less, and if you price low many more people will buy your product. And if they like your product, they will recommend it to friends and they will buy your next product, too. People are less likely to rip off low priced products, and less likely to ask for refunds, so it’s less hassle. And if you price low, for a great product, people will perceive you as providing fantastic value and over-delivering.  When you price low enough, you increase the chances that people will buy on impulse rather than thinking about it and meaning to come back to buy later, but never doing so…

Arguments for pricing high: Once you price low, it’s hard to convince people to ever pay high for your products. People may perceive low price as low value. You have to sell many more products at a low price then you do at a high price. If you price low, you will not be able to find affiliates who want to promote your products for you because the cut they get from the product will be tiny.  If you price low, all of the customers you get will be cheapskates who will never buy more expensive products.

I ended up pricing low, and sold thousands of copies of my ebook at $7, and literally had half a dozen refunds. The reaction to the ebook was amazingly positive, I got tons of nice comments, and

But some very successful marketers were telling me that I was waaaay underpricing my ebook and I really needed to start charging more. So I created a new infoproduct and charged $19, and I collaborated with some marketers on products that were even more expensive.

And it didn’t work out that well. Way less sales.  I mean, hundreds of sales versus thousands. Way less comments about how wonderful the product is.

This doesn’t mean that it’s wrong to create high priced products; it just means that you have to experiment, try different methods, and go with what works best for YOU. You also need to look at the market, see what other people are charging for similar products, and frankly…charge less.

I am working on some future products which will be released in the near future, and I will be pricing them low this time around.