Pricing Your Products

In our scramble to find a way to offer the lowest prices on the Internet, we often overlook the basic steps that we should be taking BEFORE we even offer a product for sale.

We also overlook something even more important: you don’t HAVE to have the lowest price in order to make great sales. Following are some things I do before and after determining my bottom line. I sell by having products drop-shipped for my sites, which works VERY well, but these steps should be covered no matter your distribution method.

Should you be selling this item now?

Snowboards don’t sell well in the summertime. You may have a hard time moving a pair of roller blades in January. Don’t waste your time and your site space marketing products out of season. Ask your supplier for a little historical information regarding the best time to sell their products. Believe me, to everything, there IS a season. They have the figures. If they don’t want to share this info with you, find another supplier.

Identify your costs

Profit isn’t just the difference between wholesale and retail. You have other costs to consider. Think about every penny you spend in order to get that product to the customer’s door, and plan accordingly. For example, your merchant account probably costs you about 2.2% plus 30 cents per transaction. On an item you’ll sell for $20, that’s 74 cents. Don’t forget that calculation when pricing the item. Are you warehousing the item? How much is that space costing you per item per month? Did you spend money stocking up on shipping materials? How much per unit? What about advertising? Monthly hosting costs? You may need to project some estimated sales in order to arrive at some of these figures.

This may seem very complicated, but it’s really not. Just take the figures one at a time, and you’ll arrive at a wholesale cost plus an amount that, when added together, becomes your initial ESTIMATE of “cost of goods sold”. Identifying all your costs is critical if you want to price your products properly.

Check out the competition

Search on the item you plan to sell. Check out the competitors’ prices. But DON’T get caught up trying to beat the wrong competitor. You need to stay within your “venue”.

My stores are built in Yahoo Shopping (http://store.yahoo.com). 90% of my traffic comes from there. When I seek out my competitors, I look for other businesses like mine ONLY in Yahoo Shopping. Then I compare.

If I’m thinking about selling a product, and I get 1,500 hits in 400 stores on that item in Yahoo Shopping, forget it. If I get a hundred hits in 20 to 40 stores, I’ll look into it further.

So check out the competition, narrow down your product list, make a note of the five lowest prices you find, and then ask yourself another question:

Is anybody going to buy this thing?

This doesn’t have much to do with pricing, but it should be said.

When considering products, there’s unique, and then there’s too unique. Yak Cheese may sound like something that nobody else has for sale on the ‘Net. There’s a reason for that. If you sell more than 3 boxes a year, I’ll EAT some.

Unique is Rain Barrels made in Maine. It’s Exotic Cheeses imported from Italy. Silk Parisian Lingerie. Things you don’t see every day, but would be proud to give as a gift.

Then there’s “common”. Everybody and their grandmothers are selling Alabaster Figurines on the Internet. Do they sell? Sure, in a limited fashion. Do you want to sell them? Not if you want to make any real money.

In my experience, unique products, like Rain Barrels and Parisian Lingerie, DO sell. So do Coleman Sleeping Bags, and Conair Hair Dryers. BRAND NAMES sell. Look at your potential product, and ask yourself honestly if YOU would buy it on the ‘Net.

Set your price

Take the five lowest prices you collected on a product in your list that has survived the above. Calculate your estimated cost, then subtract that from the lowest price. If you don’t see at LEAST 15% profit, don’t bother.

If you do, there are a couple of ways to proceed. You can undercut the lowest price in your “venue” by a bit, and hope to “kick off” the product and get yourself noticed. Chances are, though, that the following week you’ll find that someone has undercut YOUR price by just a bit. That becomes a losing game.

I generally set up a couple of “loss leaders”. These are desirable items (in my general product line) that I sell dirt cheap just to bring in customers. Then I price the rest of my products at the second or third lowest price in my venue. The customers come in for the loss leaders, and then I can market everything else to them via email. I spend a lot of time making my site look better and easier to navigate, and pay a great deal of attention to my customers.

That makes me more reputable in the eyes of the customer. You’ll find that people don’t mind paying just a little more if they feel comfortable in your store. They don’t like to worry that they’re buying from a “hack” who may not deliver. Nothing says “hack” like a cluttered, confusing storefront.

Follow up

After you’ve sold an item for a month or two, revise that “cost of goods sold”. Measuring past performance is just as important as setting the correct price to begin with. If sales drop, recheck your competition. If that’s not it, drop the product, or shelve it until the “season” comes back around. Don’t get sentimental about your products, and NEVER just let your store sit there in limbo once it starts to make money. This is a dynamic business; stay on top of it!

A last word (or three)

Retail pricing on the Internet is so fraught with permutations that it would be impossible to cover everything here, even if I KNEW everything. The steps above are just the basics of a process that works for me. Hopefully something here will strike a chord and work for you as well. Patience and persistence are the keys to a successful Internet business, so hang in there, and don’t quit the day job for at least a couple of weeks. ;o)

I hope this helps in your future marketing decisions.

How to Double Your Personal Productivity in Just 30 Days – 1 – Preparing Your Attack

How often have you said to yourself, “If only I could get twice as much done as I do now!” The good news is, you can… as long as you have the right method and the motivation to change. In this 3-part series, I’m going to teach you a step-by-step method that will allow you to double your personal productivity in just 30 days. Actually, you could do it in a week, but I prefer to allow for the fact that most people aren’t very consistent at applying new information!

1. Scheduling the Time:

As I emphasized in Part-1, you want to schedule your High Value Tasks (HVTs) for times when your mental and physical energies are at their peak, usually first thing in the morning, although that varies from person to person.

Your next decision is how much time you want to set aside for a given task. In general it’s pretty hard to stay focused for more than one hour of solid working time, so dividing your working time into one hour chunks is a smart way to go. Then, even if the task you’re working on takes two hours to complete, you need to schedule at least a 10-15 minute “stretching break” in between your two one-hour chunks to ensure you’re at your best when you start the second round.

The next vexing question is when to STOP working. Do you quit when you say you’re going to quit, no matter where you’re at, or do you plow ahead until, come hell or high water, you’ve completed your entire tasks?

This is where many people get into trouble. The danger of plowing ahead is that you can end up just working and working longer and longer, until your whole day disintegrates into an undifferentiated mass of low-productivity work. And you DO NOT want that. On the other hand, completing a task has such a huge psychological payoff that you won’t want to stop if you’re close to the finish line. So how do you resolve this conflict? Just apply these guidelines:

1. When you’re scheduling a task, first determine how you’ll know when you’ve finished it! Since you may well be working on a sub-task – one component of a larger task – admit that to yourself and make sure you specify what determines completing the sub-task rather than the larger task.

2. Then determine how long the task will likely take. Then add at least 25% as a safety net – most of us consistently underestimate the time we need.

3. If the task can be completed within a one hour time chunk, then you work at it until it’s completed.

4. If the task is a longer task or a more “creative” one where it’s difficult to say how long it will take, then you stop working after your allotted time expires, no matter what.

2. Preparing Your Workspace:

Make sure your work area is clean and neat: a messy environment will compromise your productivity. Be sure to lay out any documents you’ll need in advance and make sure you have any electronic documents or web pages you’ll need open and ready before you begin. Otherwise, you may spend the first 10 minutes of your “working time” just digging up these items and becoming more and more frustrated.

Next, turn your phone’s ringer off and send all incoming calls to voice mail. If you’re in an office and have an assistant, make sure he or she knows you don’t want to be disturbed. If you’re working from home, negotiate with your family so they know to leave you alone as much as possible when you’re really working.

Also, close your email, your Twitter, your instant messaging and any other means of electronic communications you have. If you’re really serious about doubling your personal productivity, you MUST be willing to make your self 100% “available” to your work for defined periods of time, and that means making yourself 100% unavailable to the demands and interruptions of other people while you’re doing a blitz on your HVTs.

3. Before You Start:

Now that you’ve prepared your physical workspace, it’s time to spend a few minutes on your mental workspace. Going into a task fully motivated will significantly improve your productivity, a lesson every athlete knows all too well.

Find whatever inspires you in your work. It could be success stories in your industry, a book about personal effectiveness, time management or productivity, or simply the vision of what you are working towards. Then spend a few minutes reading or thinking about this until you feel “in the zone”. But don’t stop there…

Close your eyes and visualize yourself working on your task. Make sure you FEEL how easily you’ll complete it and the feeling of personal satisfaction that comes from that. Once you can feel all that, then you’re truly ready to begin.

And once you begin, have a timer or stop watch nearby so you can play “beat the clock” – a phenomenal method for keeping your relentlessly focused on the task at hand.

All these preparations – which most people simply skip over – are absolutely critical to doubling your productivity. Without them, no matter how well you’ve prioritized, your execution will be second rate and the time it will take you to complete a given task can easily increase by 3-400%. So resist the temptation to dive into your work without doing these preparatory steps first. At first these steps may seem tedious but once they’ve become a habit for you, you’ll understand how essential they really are.

Join us next time for the third and final installment of this 3-part series on how to double your personal productivity in just 30 days, when I’ll share with you the strategic secrets of flawless execution.

– Dr. Symeon Rodger

The Sales Page to Product Secret Makes Product Creation Easy

Stumped on product creation?

Have a rough idea bouncing around in your head but not sure what information should be included?

Try this simple method for product ideas, getting through the outline process and final creation.

The way it works is when you have a general product idea in mind you sit down and create the sales letter before you make the actual product. I know you’re thinking this process is backwards from the norm, but I promise you, it’s okay!

This can really work wonders when you’re stuck at the beginning phases of creating a product and can’t find the momentum to get started.

Your sales page will help you flesh out a product as you think of the problems your new item can help solve. It will also act as a very handy product blueprint. Since you haven’t actually made the item, you are free to put in anything you believe will make it an outstanding value to your customers.

Don’t overly stress over the process. Don’t try to make it perfect.. just get things to a point where you can now start fleshing out your info product following the sales letter.

You can use each of your bullet points as topics or chapters to be expanded upon when you do the actual product creation. Remember that you will not be bound by the sales page you make. You can change the features of your product just by modifying the sales page. Your blueprint will then be ready to guide you through step by step till the end.

Here’s another tip:

Get the sales letter up with a subscription form instead of a buy button and send traffic to it from your existing list or through another source such as PPC.

Tell your visitors this particular product is pending release and if they are interested they can subscribe to an early bird alert list. To sweeten the deal offer them a special discount for signing up.

And one more powerful tip:

You may want to make the form extra informative by adding a feedback box where they can leave content ideas. A simple line such as “What information would you like to see included in this product?” can help you further refine the final deal.

If they’re truly interested they will subscribe to the notification list for the product release. If you get no interest then you’ll know not to pursue that particular project.

I wouldn’t suggest you use this for everything you do, but it does have its place. It can give you direction and very valuable feedback when needed.

There may be times when you get a small amount of signups, but not enough to warrant continuing with your idea. If this happens, do not leave those who signed up hanging in the wind. Send them a thank you email and a special gift for their time and feedback. This makes the experience a win-win deal for them and you.