Internet Marketing Tips – Are Low Prices Suicide?
In a recent Warrior Forum post, Jason Parker brought up a discussion about low prices being suicide. His comments were essentially that selling at low prices meant you had to sell at a high volume and thus more work, where selling at high prices meant you could sell at a lower volume and thus had less work. Well, in theory, this is probably correct. However, there is more to sales than just volume and price. This article is going to take a look at whether or not low prices really are suicide.
If you’re running your business correctly, you’re building your list before you even attempt to sell one product. Sending somebody to a sales page with no way of ever following up with them if they don’t buy the first time IS suicide because you have essentially lost that prospect forever. So let’s say you’re building your list by giving away a free report and maybe even following up with an autoresponder series containing information that the prospect finds useful. Let’s also say that you’ve built a list of 1,000 prospects to make this example an easy one to follow.
At this point in time, regardless of what type of product you’re selling, you’ve done the same amount of work to actually get these people into your list…agree? So now when it comes time to send them your sales pitch, regardless of whether your product is $7 or $197, you’re doing the same amount of work to get your message out to these people. It only takes one click of the send button to reach all 1000 people. So really, what it all comes down to is conversion.
Conversion is going to depend on many factors including how good your sales page is, how much in demand your product is and yes, the price. Naturally, fewer people will buy at a higher price on average. So essentially, it comes down to what your conversion is that will determine whether it is better to sell at a low price or a high price.
Let’s for argument sake say that at $7 per item, you convert at 10%, which is really pretty good. You’ve sold 100 items to the 1000 prospects. That translates into a profit of $700. Now, let’s say you were selling a $197 item instead and only converted at three tenths of a percent. That means on 1000 prospects you only made 3 sales. That’s a profit of only $591. So in fact, you would have done better with the $7 item.
The only way to know this is to test. The point is, it’s not the price of the item that determines if it’s worth selling or not. It’s how well it converts.
To YOUR Success,