When leading an online business with digital products, understanding pricing and how the entire process should be conducted is essential. Pricing digital products might be the most difficult thing to determine, so some guidelines are always helpful. If you want your business to succeed, you will have to learn some tricks that will make this entire pricing process easier.
Even though there is no universal pricing or marketing strategy that fits all, checking out recommended practice is key. That is why, in this blog, we have included some tips that might help you with how to price digital products. Once you read the guidelines, you will be more aware of what you are doing and which direction you should go.
Table of content
PLR Airbnb Staging Booklet
PLR Airbnb Cleaning Checklist
PLR Selfcare Planner
PLR Financial Planner Template
PLR Real Estate Flyer Template
PLR Real Estate Reels
PLR Notion CRM Template
PLR Airbnb Instagram Post Templates
PLR Airbnb Digital Welcome Book
PLR Airbnb Welcome Book
PLR Airbnb Signs
PLR Airbnb Inventory Checklist
PLR Digital Business Planner
PLR Digital Planner Set
PLR Social Media Planner
PLR Real Estate Listing Presentation Template
PLR Real Estate E-Book Template
PLR Real Estate Marketing Plan
1. Check What The Competitors Are Doing
When you are ready to set your prices, one of the first things you should do is check out what your competitors are doing. We are not saying that you should use them as an example or that you have to measure and compare your products to theirs. However, you need to know at what cost they are offering their goods so that you can manage your prices better.
In other words, it is essential to find a balance between pricing digital products that feels fair for both you and your customers. Consider the value you bring to the table in this process. For instance, if you price your products too low compared to others, it might signal to customers that your quality is not as high. On the other hand, pricing your items higher can highlight the added benefits and unique offerings that only you provide.
So, put yourself in the shoes of your potential customers and think about how they might perceive your pricing. What features does your product have that set it apart from your competitors? What unique qualities does your brand bring to the mix? It is also worth considering who your target audience is and whether offering a money-back guarantee could ease any concerns they might have.
Lastly, make sure your product offers are clear and easy to understand. Do not shy away from standing out - your competitors are likely looking at what you are doing, too!
2. Do Demographic Research
Another thing you need to do before pricing digital products is do demographic research. This is a great way to learn about your audience's social traits, like education, income, and jobs. This information can give you insights into their spending habits.
For example, if your audience has a higher disposable income, they are more inclined to buy premium digital products. Figuring out the income and spending habits of your customers can be a game-changer for your pricing strategy. Namely, if you understand how much they are willing to spend on digital products that you offer, you will be on the right track to increase your profits and ensure the success of your business.
You can do this by conducting surveys using Google Forms with basic questions. However, keep in mind that people might hesitate to share their exact income figures, so it is best to ask closed-ended questions with answer options presented in ranges.
3. Consider Value When Pricing Your Products
It goes without saying that when you start selling digital products, your main goal is to become successful, which includes earning a lot of money from it. However, when it comes to pricing, you should be aware that value needs to be a priority. This means you have to be honest with what you offer and consider the efforts you have put into creating something that people can buy.
Remember that when you create digital products, your goal is to tackle a problem and make life easier for others. While you are putting in all that hard work (and sometimes feeling a bit frustrated), you are also hoping to make a profit from your digital product sales.
Take, for example, a software plugin that is crucial for running an online store, like a payment gateway. This type of product offers tremendous value - without it, a business would not be able to process transactions. In short, you are not just selling a product - you are enabling someone to successfully operate their online business, making a significant impact on their success!
Or consider selling a detailed sewing pattern on your website. You are providing your customers with the joy of crafting something unique while also removing the confusion and stress that often come with figuring things out on their own.
By offering something that saves them time and effort, you are truly adding value to their experience and hobbies. So, it is all about finding that sweet spot where what you offer meets the needs of your customers!
4. Take Into Account All Your Expenses
In addition to pricing digital products, it is important to make sure they cover your production costs at the very least. Otherwise, you could face some serious business challenges. Figuring out costs can be a bit tricky, but it is crucial to get it right. If you calculate things incorrectly, you might end up selling your digital product for less than it costs to produce.
First up, think about your direct costs. These are all the expenses you incur during the production process - like paying freelancers, hosting your website, and any software subscriptions you rely on. If you wrote the first draft yourself, remember to include the value of the time you spent on it by considering how many hours you worked times your hourly rate.
Next, do not forget about your indirect costs. These are the expenses that are not tied to one specific product but are essential for running your business overall. This can include things like co-working space fees, internet bills, and utilities. Also, take into account any team members who contribute, even if they are not directly working on the product, like a virtual assistant.
Then, you need to think about your fixed costs. These are the ongoing expenses you have to cover, whether you are actively creating a product or not. Consider things like taxes, insurance, loan interest, and other administrative costs.
Lastly, you will want to add everything together to see what your total production cost looks like. This final figure will give you a good idea of how to price your digital products.
As you can see, pricing digital products is a process that involves several steps and factors. You do not just put a price on an item and expect people to simply purchase it. You need to be sure that you have priced your products fairly so you can earn real profit and loyalty from your customers.
Need more tips on selling digital products? Please check out our blog page.
Why is pricing digital products important?
Proper pricing ensures you cover production costs, maximize profits, and position your products competitively in the market.
How should I research competitors when pricing digital products?
Analyze competitor prices on platforms like Etsy or Gumroad. Focus on what makes your product unique and set prices that reflect its value.
What role does demographic research play in pricing digital products?
It helps you understand your audience's spending habits, enabling you to set prices that align with their budget and perceived value.
How do I price digital products based on value?
Focus on the problem your product solves and its impact on customers' lives. Higher value often justifies premium pricing.
What costs should I consider when pricing digital products?
Include direct costs (software, freelancers), indirect costs (utilities, tools), and fixed costs (hosting, taxes) to ensure profitability.
I'm the founder of Hype PLR, where I create high-quality digital products for entrepreneurs. I'm passionate about e-commerce, passive income, and helping digital sellers grow their businesses successfully.
Is Selling Digital Planners Profitable? Tips for Success and Growth