Underpricing Your Products WILL Put You Out of Business

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I was catching up on some comments at some of my other sites. And someone questioned the fact that I occasionally say that my colleagues should charge more for their products.

It is one thing when someone just point blank asks you why you do something.

It’s another when they accuse you of having some other motive, when all of your other actions online CLEARLY state something different.

With all the free stuff I give away, and resources I point to, and blog posts that I could turn into ebooks and charge for instead, do I REALLY seem like the kind of person who just says things so I can make sixteen more bucks this month.

LMAO!

Out of about 100 products of the thousands I am asked to review and reccommend, I’ve said that a person should have charged more about, maybe five times. I mean it every time.

The reason why is that if you create a product that should be priced at $77 and you charge $47 for it, if you’re not taking all the related factors into consideration, you can put yourself out of business, just by having a popular product.

I see it all the time and it breaks my heart to see a person who could do so much, for so many people, crush their own business and not even know it. It’s a hard lesson to learn. There’s pricing something fairly, and there’s pricing somethng so low that it’s going to end up costing you money down the road. It can even cause you to do a disservice to your clients.

How can you provide support for a product if you priced it so low that you don’t have time to support your clients — because you are forever too busy creating the next product so you can have more money… to create the next product?

You’ll put yourself on a treadmill that you can’t get off. It took me YEARS to recover the first time I underpriced a product. Literally years. It was my first best seller and if I’d charged just five more dollars per unit in the beginning, I could have done so much more of my free services, and would have been able to create at least two jobs.

I know a lot of people will say “You should have priced this higher” with a wink, to try to get the person who created the product to charge more, so they can make more money.

I’ll tell you what - I love making more money, but even ten dollars more per sale in affiliate money is chump change to me, and to most other people that are actually well known enough to have their names highlighted as testimonials on other people’s products.

Not to mention that the majority of the time, if you’ve already set a price point, changing it without notice would kill all your sales, so that would actually make everyone LESS money.

So yeah, there’s an equally long response to that comment in my other newsletter if you care to peruse it.

But I thought it would bear repeating - underpricing your products WILL put you out of business. It almost happened to me twice, once when I was a newbie, and again this year. Since most of my revenue depends on my clients being in existence next year - yes, I do care in terms of dollars and sense.

I’m Proud to be an American and I’ll never be ashamed of being a capitalist.

But the almighty dollar is never my reason for giving someone a compliment, or public advice.

Price your products failrly. But don’t make yourself broke either.

You could have stayed working a day job and done that.

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December 27, 2006 | Filed Under rants

Comments

3 Responses to “Underpricing Your Products WILL Put You Out of Business”

Robert (2 comments.) on January 15th, 2007 7:23 am

Do you think my price is too high?
Thanks
Robert
Feel free to e-mail me for any suggestions.
Robert
Tinu Abayomi-Paul (77 comments.) on January 15th, 2007 7:27 am

Hi Robert,

It’s hard to say, friend. I don’t know your market. Maybe a bit more info?

Thanks for coming by,

Tinu
Robert (2 comments.) on January 18th, 2007 6:48 am

Hi Tinu
I am in the golf business and my website offer
a technique to solve your problems with
slices or hooks. As I am concerned there is
over 1 million web site on the golf actually and
over 465,000 click per day average.The problem is the ranking.However there is also
books on golf which also affect the sales.Mine
is an e-book instanly download.So with theses
info, do you think you can putt a price on it.
Thanks for your possible help.
Robert

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