How to tell if your product price is too high?

[eTox]

Hey everyone,

So I'm starting to sell a product that's similar to what exists on the market and was selling great before.

I know that my competition sells it at $130 without a problem.
I know that an alternative (cheaper + lower quality + a little different) sells on average at $100.

I've priced mine at $199 and got 1 sale.

I know that the traffic is laser focused. I'm running Google Ads for the exact search term. I've had 200 clicks. The website is looking good. Social proof and everything. I'm not worried about that.

If it wasn't working for the cheap competitors then there is just no way that they would afford to pay so much for a single conversion... they must convert 1/20 visitors to just break even.

Based on Hotjar I can see that the majority of people spend 1 min or more on the website and actually click buttons, select options, etc. They add to cart, but no one buys.

Side note: you can not find my direct competitor through google search. You can only find cheap alternatives.

My assumption is that the price is too high.

The category is personalized gifts. And I am assuming that at this price point, even though the product has a wow effect and is unique, people are just not ready to commit right away. Perhaps they need to think about it and come back later.

I will start running display ads remarketing soon to follow website visitors around and see if they convert.

Any thoughts, anyone?

 

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[Empires]

The only way to see if your price is too high is to test it.

You've got enough data to know your conversion rate when priced at $199.

Test your conversion rate at $149 or $129 and see if it makes a difference.

If it doesn't, then your price wasn't the problem and it's something else.

 

[alexkuzmov]

Hey everyone,

So I'm starting to sell a product that's similar to what exists on the market and was selling great before.

I know that my competition sells it at $130 without a problem.
I know that an alternative (cheaper + lower quality + a little different) sells on average at $100.

I've priced mine at $199 and got 1 sale.

I know that the traffic is laser focused. I'm running Google Ads for the exact search term. I've had 200 clicks. The website is looking good. Social proof and everything. I'm not worried about that.

If it wasn't working for the cheap competitors then there is just no way that they would afford to pay so much for a single conversion... they must convert 1/20 visitors to just break even.

Based on Hotjar I can see that the majority of people spend 1 min or more on the website and actually click buttons, select options, etc. They add to cart, but no one buys.

Side note: you can not find my direct competitor through google search. You can only find cheap alternatives.

My assumption is that the price is too high.

The category is personalized gifts. And I am assuming that at this price point, even though the product has a wow effect and is unique, people are just not ready to commit right away. Perhaps they need to think about it and come back later.

I will start running display ads remarketing soon to follow website visitors around and see if they convert.

Any thoughts, anyone?

Can you give a link?

 

[eTox]

The only way to see if your price is too high is to test it.

You've got enough data to know your conversion rate when priced at $199.

Test your conversion rate at $149 or $129 and see if it makes a difference.

If it doesn't, then your price wasn't the problem and it's something else.

That's a good idea.

If the only client that I had starts getting worried about my price change, I'll refund him to match the price. That's not a problem.

I've decided to go all in.

Changed the pricing from $199 to minimum I could possibly afford - $89.

It's also the lowest price my competitors have. At this point I'm not making much at all, but I just want to see if I start getting sales. This is to remove price as a factor of conversion at all. Plus, as soon as I start selling I can start raising the price gradually to the point where I'm satisfied with the sales volume and my margin.

After 250 clicks and 1 sale it's impossible that I can sell at original price point. The question is now will people convert at a competing price point?

I'll continue running the same ads for couple of days too see results. I'm also moving to FB ads because it's stupid to compete with manufacturers on price...

Lessons:
1. Never compete with manufacturers on price
2. "Better quality" won't sell for x3 the price of competition.
3. No point in selling higher priced goods to the same traffic as competitors simply because they will always try to find cheaper prices.

Would love to hear your thoughts, people.

 

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[theag]

If it wasn't working for the cheap competitors then there is just no way that they would afford to pay so much for a single conversion... they must convert 1/20 visitors to just break even.

Side note: you can not find my direct competitor through google search. You can only find cheap alternatives.

It was probably profitable for them before copycats like you came in and ruined the business model for everybody.

 

[eTox]

It was probably profitable for them before copycats like you came in and ruined the business model for everybody.

Thought provoking indeed.

It's because of this attitude I like your comments @theag.

I was going to defend myself but who gives a shit. I'll add more to that. Not only am I copycat that's probably ruining things for them, but I'm also a naive stupid kid who doesn't know better.