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Product Pricing Strategies to Sell and Sell and Sell | Inc.com

Welcome to the obscure, murky, and sometimes scary world of product pricing. If you are reading this, it’s probably because I finally got a title catchy enough to draw you in… or like plenty of other entrepreneurs, you are unsure of how to price your product (most likely).

Elementary, My Dear Watson.

As in elementary math and science, which is what most of you probably assume product pricing consists of. But this is not entirely true, and gray areas in business create the obscurity mentioned above. Identifying the perfect product price ultimately rides on how much you understand your target market’s behavior. Pricing isn’t just about how much the market will bear. Sometimes it’s based on emotion and perception, like paying more for an iPhone because of the time and energy that’s put into it.

Step One: You Need A Clear Revenue Goal
This is a necessary piece of your pricing puzzle and you should look at it every year, or quarterly, or even monthly. No matter what phase of business you are in, you need to know exactly the amount you plan to (and can realistically) do in sales.

Example: “I want to sell $10,000 a month on Amazon.” Let’s just say you are selling a $20 product, do the math to figure out how many units you would need to sell to make that amount.

Questions to Ask: Is it possible? Can you sell 500 units a month? What amount does the top seller in your category sell every month?

Goal: Using measurement and indicators while analyzing the viability of your product will help you establish clear revenue goals for each phase of your growth. If your model isn’t viable at the $20 price point, but you know the market won’t pay $30, you need to reevaluate.

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Product Pricing Strategies to Sell and Sell and Sell | Inc.com.