 The price is right. 14 strategies to find the perfect price for your products. Hey, JR Fisher here. Thanks for clicking on this video. I'm going to make it worth your while. I'm going to give you 14 strategies that are really going to help you out when you're trying to price your products online. It's really important that you get the right price. And by the end of this video, you'll have all these strategies so you know that you're going to be pricing things correctly. Now, if you haven't done so so far, make sure you subscribe. Hit that subscribe button down there. Turn it from red to gray. That's the color it changes when you click it. And a bell will pop up. You want to ring the bell? Turn on all bell notifications so you're notified each and every time I go live. Or if I upload a video like this one right here. Okay. And I also have some links down below. There's a free course down there. You can grab it. $97 course. It's just click and learn. You'll want that because it won't be free forever. So go ahead and click it and get it. Okay. No credit card required. So pricing strategy is determined by a couple of different things. It's determined by your audience. What is your audience willing to pay? That's part of your pricing strategy. If they're willing to pay more, you can charge more. If they're not, then you can. It doesn't matter. No other factors matter. And then the other part is your competition. What is your competition charging? If you're basically selling something similar to your competitors, you're going to have to fall in line with what their pricing is. If you have added advantages and you have better service or better products or whatever it is, then of course you can charge more. But we're going to determine all that in this video today so that you know, so that you're pricing right and you're making a profit. Now to figure out your pricing strategy, you've got to figure out what your product cost you. Now that is vastly different in two different scenarios. If you're just buying products from somebody, you know what your cost of the product is. You've got all your other added costs, which we'll talk about in just a minute. But if you're producing your own product, you've got a lot of different components to look at. You're going to have your cost of good sold, your production time, you're going to have your packaging, you're going to have your promotional materials, you're going to have shipping, you're going to have utilities, you're going to have employees, you're going to have your long-term loan cost if you borrowed money. So there's a lot of factors to look at. And you've got to look at your customers once you've defined your market niche. What are they willing to spend versus how much do they have to spend? What is their income level? You should know this before you set your pricing. You've got to find your value proposition. We sell survival food. I own the survival food company called Survival Cave Food. You've got to visit and check it out. But we're known for selling a super high quality, all natural, no preservatives, no chemicals, good canned meat. And since we're selling something like that, we can get a little bit higher price, but we try to keep the prices a little bit lower so that it's a super value. So that's our value proposition. Now there's six common pricing strategies in every business. And I want to go through each one with you and explain to you what it is. The first one is called Cost Plus Markup. And basically, it's the cost of your particular product plus the shipping and labor and all that stuff. And then we're going to add a percentage above that, maybe 20%, 30%, 35%. I like to have between 30 and 60% on any products I sell online. Sometimes I go below that. Sometimes they go above that. So you've got to figure out what that sweet spot is. The next one is Competitive Pricing. Now this one here can be dangerous, but it can be also very rewarding. And Competitive Pricing is where you're trying to price your competitors out of the market. You're trying to be lower than your competitors. Now, if you're a smaller company and you don't have a lot of funds and you're not making enough profit, you won't be able to cover your overhead. But if you're a little bit bigger and you do have some profit to play with and you can underprice those competitors, you can steal a lot of their particular customers, which is a very good thing because you build your customer base. And then later on, maybe you can sell for a little bit higher price. The next one is Value-Based Pricing. Now Value-Based Pricing is based on perceived value of your product or your company. So Louis Vuitton sells purses. Louis Vuitton sells purses for thousands of dollars. If you go into a TJ Maxx or you go into a Ross or Marshalls or something like that, you can buy a purse for 20 or 30 dollars. But there's this perceived value of a Louis Vuitton purse. It's this brand. Women can carry it around. And other people know they spend thousands of dollars on a purse. And I think what's funny probably is most of those purses, they cost thousands of dollars. They don't have that amount of money in the purse. So what's the point? I don't understand why you would pay thousands of dollars for purse and you don't have 25 dollars in it. But that's their way of pricing their product. Value-Based Pricing is really good if you've got a strong brand and a strong following. The next one we want to look at is price skimming. Price skimming policy basically is when you go out into the market and you charge the highest possible price you can and as the market gets a little bit more saturated you slowly lower your price. Another way that people do this though is price gouging. You don't ever want to do that. I saw this happen during the world illness. I think I can say that on YouTube. And a lot of companies that sold survival foods that were competing with us started upping their prices just crazy amounts. We did not up our prices at all during the illness of the world because we felt like people really needed the food and we wanted to get it out to the people more so than just making a lot of money. And we're still around. A lot of those companies are gone because they ripped people off. Don't do that. The next one is penetration pricing and discount pricing. Now the point behind this is you're going to keep lowering your price to where you start taking everybody else's business. Okay. Now a lot of companies have done this in the past. Uber did it in the beginning. You know you could get an Uber for four or five dollars to go all the way across town 15, 20 miles. That was insane. But what it did is it got a lot of people hooked on Uber and they started upping their prices. So you know you can do that to gain a market share but you have to have a lot of money to be able to pull something like that off to build your base of customers. Next up is keystone pricing and keystone pricing is where you just take the cost of your product and you double it. You have a keystone type of calculation. It could be triple it could be quadruple whatever you want it to be but it's just a flat amount. Now I don't believe in doing this. I believe that if somebody buys a larger quantity they ought to get a whole lot more discount. We do that a lot with our survival food. I also believe that some products just because it costs you a certain amount of money doesn't mean it's worth double that. I was in the automotive industry for many years and I would watch a lot of my used car managers put ads in the paper and they would put an ad in for a car and I would say had you determined the price and they said I added 20 percent. Well that doesn't make any sense because who's to say that the value of that car is right. You know maybe we paid too much for that car. Maybe we got that car really cheap and you should market up 40 or 50 percent. Just because we own it for a certain price doesn't mean that the market thinks it's worth that price. You can it's really hard to do pricing models like this but I do want to let you know about it. Now the next thing that comes about is MSRP which is manufacturers suggested retail price and we have that on a lot of our products but we also have MAP. MAP is minimum advertised price so we have an MSRP and we have an MAP on our products because we have a lot of people selling our survival foods. So the way it works is MSRP is the top price. It's the top price and you may want to show some discount from that. MAP is one of our retailers decide they want to sell it and they want to sell it for a discount. They cannot go below minimum advertised price so a price of the product may be $10 and we say that you know MSRP is $18 but you can't go below $14 if you're going to advertise it and the reason we do that is we don't want to take a bigger company and let them you sell something for a dollar profit and everybody else can't afford to do that and they wipe out everybody else in the market. So that's why we have an MAP and an MSRP. One more thing I want to talk about is dynamic pricing where your prices go up and down based on what the market is doing. You see this a lot with gas prices. Your gas prices for your car go up and down and up and down constantly. You never know what you're going to pay for gas but usually in the market if you're selling products online or you're selling services online I don't think I would drastically up and down my price a lot. I think it's very confusing to the consumer but it is something that's out there and a lot of people do use it. The next step is multiple pricing. So if they buy multiples of a particular product or a bundle of products you can change your pricing according to that. A lot of times it'll get people to spend more money for a bundle or a lot of times it'll get people to spend more money for multiples of the same item. Since we sell survival food maybe we have a case of meat that's $300 but if you buy two cases of meat you can get it for $550. That's just a little example. So you can do this multiple pricing or this bundle pricing. Maybe bundle pricing would be you know we would sell them some freeze dried food some canned meat and a tent and all three of those would go together and they would be cheaper than if you bought each one individually. And the last one is loss leading pricing. Loss leading pricing is where you put a product out there for a really low price maybe even below your own cost to gain the customer. Now we've done that in the past where we'll sell something for less than what it cost us to actually make that product but we do that because we know we add somebody to our list and we're going to do email marketing we're going to market to them and we know the average customer value over a lifetime is going to be x number of dollars and we'll get that money back so it's a way of building our list. There's also psychological pricing. There was a study done at MIT Chicago and they had some women's clothing and they put it on sale for thirty four dollars thirty nine dollars and forty four dollars. Which price do you think sold more? Put it in the comments below if you think you know what it is I got to tell you right it's in the video I got to tell you it was thirty nine dollars thirty nine dollars worked better than thirty four dollars that's kind of crazy right they would actually spend more money but psychologically thirty nine dollars is a good price forty nine dollars is a good price fifty nine dollars good price forty four wasn't and thirty four was not. Let's take a quick look at Netflix pricing over a period of time so you can see how all this works out. Okay so I've got a screen here and it shows what Netflix was charging basic standard and premium and it's really a primary example of brand using penetration pricing to eliminate competitors in the late nineteen nineties DVD Reynolds were becoming popular with blockbuster controlling the market you can probably recall the unforgettable blockbuster smell of popcorn and plastic carpet cleaner whatever yet blockbuster had two major flaws late fees and limited selections Netflix offered a solution customers could order DVDs online through a standard paid per rent model with a better movie selection and no late fees in 2000 you could rent four movies at a time without return dates for less than sixteen dollars a month the average movie watcher could pay under one dollar per DVD compared to blockbuster which charged four ninety nine for a three day rental after Netflix wiped out blockbuster and other companies like Hollywood video it eventually raised its prices to maximize profit margins the low price point let people try the service and get familiar with the brand which helped Netflix launch its online streaming service in 2007 so as you can see they they built their book of people and then their prices went up go figure sounds like uber all over again anyhow guys you have all the tools you need now you know about all these different pricing methods take these out apply them to your product services whatever it is if you have any questions about this please comment below put something in there question if you want or if you just want to share some successes or a failure that you had and you want to help other people out remember when you comment below it helps other people you may be asking the question you may be putting the comment that somebody else was thinking about so please please do so give me a thumbs up if you don't mind don't forget to subscribe if you haven't done so and ring the bell turn on bell notifications oh yeah turn on all bell notifications so you're notified every time I go live or if I upload a new video thanks so much for watching this video grab my free course below and I'll see you in the next one hey thanks for watching my video don't forget to subscribe to my channel and click that little bell right here so you can be notified every time I do a new video also click on one of those videos there keep watching on my channel