Pricing your products or services appropriately is a challenging part of any online business. You know what you have and what you can do, but do you know how much you should charge? Consider these few ideas when you are picking your price points.

First, find out what the competition is charging. Write down the prices of as many comparable products or services within your niche. By comparable, I mean pick those products or services that are the same or similar to your own.

Second, create a list of the top three products or services you’ve identified. These should be the items you feel would be most likely to compete directly for the attention of your target audience.

The last step is to consider the following questions:

  • Does your product or service introduce something new? Is it something no one else is offering? If so and geared toward consumers, charge 20%-50% more than your highest priced product or service. If it’s geared toward business people, charge 30%-100% more than your highest priced product or service.
  • Does your product or service provide a solution different from your competitors? If so, charge the median price; the average price between the lowest and highest products.

Keep in mind that just because someone else is selling for less doesn’t mean you should lower your prices. It is not always a good thing to be the cheapest out there. You might be surprised to know that you can take away a competitor’s business by increasing your value and charging a higher price. One of the biggest secrets of pricing is that people assume a higher price means better quality and more value.

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