There is a tendency among new business owners to price their products and services too low in the hope that they will attract more customers and not be given a reputation of being overpriced.
There are several problems with this strategy.
First, the kind of information business we propose for solo Internet entrepreneurs won’t have any direct competition.
The products, information and business execution are likely to be very unique and tailored to the owner’s personality and experience.
If you base your business on your own knowledge, skills, education, and passions, how can anyone copy those attributes?
They can’t and that’s a good thing.
You will be able to set your own pricing without having to worry about relevant direct price comparisons.
The second problem with under pricing your information products is that you will likely be seen as a run-of-the-mill service that has nothing of special value.
The cutthroat businesses thrive on razor thin margins and moving truckloads of products.
Hopefully, that will never be your business strategy!
In addition, cheap pricing in many niches suggests that you will not give good customer service or after-the-purchase assistance.
How can a business afford to spend time with customer’s product issues if there are only a few cents of profit in each sale?
On the other hand, if you charge a higher price for your information, in whatever form it takes, you will have the benefit of being perceived as having a high value offering.
It’s the “you get what you pay for” syndrome.
Higher pricing will attract a different kind of customer.
Instead of appealing to the buyers that are always looking for a discount, you will appeal to those who are after quality products, unique and special information, and a quality web site and customer service experience.
These people, usually in higher income brackets, will become the excellent customers that understand value products, don’t question pricing as often, and appreciate your personalized service.
They expect to pay a premium for the way they want to be treated.
Higher pricing will tend to push your business into the less populated territory at the top of your niche.
You will be able to differentiate your products and services from those of other competing businesses.
Higher pricing will allow you to sell fewer products and generate similar or greater revenue.
Since you have to sell fewer products, you will have fewer complaints to deal with, fewer customer requests for your time, and fewer follow-ups, downloads, etc.
If you decide to follow this strategy, it goes without saying that you must provide your customers with products and service that are noticeably above the other lower priced options available to them. Certainly that suggests that you have identifiable knowledge, wisdom, experience, or talents/skills that others will notice are infused into your products. You can’t just say you are going to choose a certain kind of high end customer without giving the corresponding high end products and services.
You will need to “earn your keep” so to speak, but your customers will be loyal and attracted to staying with your service because they will recognize its superiority.
To your online business success,