2.8 HOW TO PRICE PRODUCTS New

How to Price Products

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Now, we’re going to talk about how to price your products. First, let’s talk about front end products. What are front end products? They are the products that the customers purchase, it’s not the upsell products but the first products that they buy.

Pricing strategies for front end products will depend on how you source them. If you dropshipping the product directly from the manufacturer from China, let’s say Aliexpress, then I recommend that you use the 3 times pricing rule. It’s simple, get the cost of the product + the cost of the shipping then multiply it by 3. And that is the minimum that you should price your product. If you think that you can get away with pricing it even higher, then you should totally go with that. The reason we have the 3 time pricing rule though is so that we can advertise the product with Facebook Ads and have 15 to 25% profit margin.

As you add more upsells, which we will do later in Step 4, you’ll be getting more profit from a customer getting them to purchase those items. 

Now, let’s talk about print on demand products from services like Printify. Print on demand products are made custom for a targeted audience. You can be more aggressive with your pricing strategy on this. A nice strategy to strategy to start with is to go 2.5 times the product price + shipping.

An example is this Unisex Tee from Printify. $7.88 x 2.5 = $19.70 then if you add $4 for shipping, the total would be $20.70. So a good minimum price for this tshirt would be $23.95.

Now, there’s also another type of shipping option that you may want to use in your store and that is, getting an item for free just pay shipping. So you price your product in the store for $0 and then charging for shipping for $9.95.

This strategy can work if you’re advertising your product on Facebook because you can advertise your product as being FREE.

To run these different shipping options together at the same time, Free shipping option and $9.95 shipping option, you’re going to have to do some advance shipping rules and you can do this with weight based shipping rates. I’ve included the advance weight based rules that you should utilize.

Also, keep in mind that you should never price a  $10 item at $10. that would be a very big mistake. You should always price it a few cents lower, let’s say $9.95. It’s important that you price your products in a consistent way. So all of your products should be at cents, or 97 cents, etc. And try not to mix them up and this strategy is called decent pricing.

Now, let’s talk about maximum price point. I usually suggest that beginners stick to super cheap products because I honestly didn’t believe those beginner store owners to set up their stores correctly and to advertise them correctly. The cheaper the products, the less the customers are going to scrutinize the store for mistakes.

But recently I’ve decided to take a different approach and instead hold everybody accountable. If you build a trustworthy store, combined with a viral product and the right ad, you can have success.

For example, as shown in this case study video in the Wholesale Ted Youtube Channel, this pair of shoes resulted in over $1M in sales. The reason why it sold so well was that it was highly unusual and appealed to a niche. The skull niche that no one else was creating good products for.

So, no there is no maximum price point. You can be successful as long as you focus on finding that super high profile product and making your store trustworthy.

Let’s talk about one more thing and that is how price upsells. Now, upsells, you don’t have to price them with a high-profit margin. Why? Because they are basically free money. Your front end product is already paid for in traffic for when customers come into your store. So anything else they buy is a bonus. So you’ve got a lot of flexibility when pricing your upsells however there is one thing to keep in mind and that is to never price the upsell double the price of the front end product that initially brought the customer in.

Initially, if you’re selling a printify shirt for $23.95, don’t sell an upsell that cost more thatn $47.95. Or if you’re selling a cat spoon for $9.95, don’t choose an upsell that costs more than $19.95.

These are my pricing strategies based on my experience however if you think you’ve got a better strategy or if you can get away with breaking some of the rules that I have outlines here, then perhaps you should go for it. Remember there is no formula to success. I’m outlining pricing strategies that have worked in the past, but it doesn’t mean that new innovations can’t be made. If you are new and you don’t have the experience, then these pricing strategies are great starting points.