Price Your ClickBank Products for Maximum Profit

Choosing the right price for your digital products is one of the most critical, yet difficult, aspects of your business strategy.

Most merchants understand that over-valuing a product kills sales. It is also fairly well understood that under-pricing cuts the unit revenue without any guarantee of a significant gain in sales volume. But few people are aware of a third (but equally important) pricing observation; that compromise pricing can be as harmful as either of the other two blunders.

To understand why this is the case, we need to examine the principles that lie behind effective pricing strategy. In general, merchants adopt one of two key philosophies when they price a product. They either set the price at a low level (which produces a low margin but high sales volume), or they choose a high price level (which trades off volume in order to gain margin).

These two approaches are known respectively as "penetration pricing" and "pricing for profit." The former strategy is typically used by new competitors in a market, or by existing retailers that need to quickly establish a position of dominance after a product launch. The latter technique is favored by established businesses with mature products, where the objective is to earn the maximum profit yield from an existing dominant market position.

It is clear that, whether the strategy is to price low or high, going too far in either direction can be self-defeating. But mid-way pricing is equally ineffective, as it compromises both strategies; it unnecessarily discounts the product without doing so sufficiently to generate a significant improvement in volume.

As a vendor of digital merchandise, you are at a distinct advantage over traditional merchants, since there are no marginal costs associated with your business. Regardless of how low you choose to price your product, you are still guaranteed to show a gross profit on every sale. In contrast, a merchant of physical goods has real fulfillment costs (product manufacturing, damaged and unsold inventory, storage, shipping and handling) that impose a fixed lower price limit below which each sale represents a loss. This advantage affords you great flexibility in your pricing, but even if you use this flexibility to pursue a penetration pricing strategy, you should still be aware of the risk of counter-productive price-cutting.

Some ClickBank merchants use an experimental approach to pricing. Their aim is to establish the most profitable price through trial an error. Although this is understandable, even logical, it can be a customer-relations nightmare. You should think carefully before over-pricing a product and subsequently being forced to reduce the price in order to stimulate demand. Nobody likes to return to a website and see that a product they already purchased is now being offered at a lower price.

The opposite approach is to steadily increase prices from a low level, and is usually less of a cause for concern. Some merchants launch their products with a deliberately low introductory price - a benefit that they emphasize in their sales pitch. The time-limited, or volume-limited, nature of this technique can be a powerful incentive to buy, and it also allows the merchant a trial period in which to observe sales behavior before setting a definitive price to meet his longer-term strategic objectives.

About The Author

Copyright © Tim Coulter. All rights reserved.

Tim Coulter is a consultant and software developer who helps netpreneurs to harness marketing technologies.

He is also the author of "ClickBank - The Definitive Guide" The Ultimate ClickBank Tutorial & Reference Manual.

http://www.clickbankrevealed.com/

In The News:


pen paper and inkwell


cat break through


Wimpy Google and Michael Jackson: Birds Of A Feather

Google Inc. is suing a Houston-based company for allegedly clicking... Read More

Local Business Advertising & Google Adwords

"I don't need the Internet to advertise - I'm a... Read More

How To Increase The ROI On Your PPC Campaigns

Pay-Per-Click (PPC) advertising is one of the most cost effective... Read More

AdWords Work: They Really Do!

In 2003 I was accepted by Google into their AdSense... Read More

How Much Should You Pay for a Click

You have a web site ready for action. Your product... Read More

Affiliate Tips to Raise Your ROI - From Loser to Winner in 30 Days

"Todd" was keen to compete in one of the most... Read More

How To Use PopUps With Google Adwords

One of the common issues that marketers face when using... Read More

The Long Term Benefits From Pay Per Click Advertising

Businesses are starting to look closely at the long-term benefits... Read More

The AdSense Formula for Making Money

I often get asked what the secret is to making... Read More

The Effect Of Smart Pricing In Adsense

We constantly receive phone calls from clients, prospective clients and... Read More

Disguise Your ClickBank Affiliate Links Using Status-bar Faking

Many surfers are savvy enough to identify ClickBank affiliate links,... Read More

Three Google Adwords Secrets for Massive Online Profits

If you know anything at all about Internet marketing, then... Read More

Google AdSense Fraud - Deep Insight

It's worthwhile to examine Google's definition of Google AdSense and... Read More

Run a Profitable Google Adwords Pay Per Click Campaign

Google and Yahoo-Overture control over 90% of the... Read More

Price Your ClickBank Products for Maximum Profit

Choosing the right price for your digital products is one... Read More

Pay Per Click Advertising For Home Business Owners

The biggest stumbling block for most home business owners is... Read More

Adsense Secrets

Pst! Wanna know some Adsense secrets? The only secret is... Read More

Are Small PPC Search Engines Really Worth The Effort?

Are Small PPC Search Engines Really Worth The Effort? The... Read More

The New Google Ad Links

You know about Google Adsense, now it's Google Ad Links... Read More

The Truth About Pay-Per-Click Ads

Are pay-per-click ads the best method of getting customers to... Read More

How to Waste Money and Annoy Potential Customers

Why do some companies bid on keywords for products they... Read More

Profit from Adsense with Adwords

Here's a feisty trick where you can profit from Adsense... Read More

99 High Paying Keywords: The Secret Is Out!

Incorporating high paying keywords into your site is critical to... Read More

The Perils and Pitfalls of Pay-per-click Advertising

In this age of speed dialing, T1 lines and other... Read More

It Makes Sense to Add AdSense to Your Blog

Google AdSense is easy to install on a web page... Read More

AdWords Campaign Set Up Tips

It's easy to overlook the basics of a strong AdWords... Read More

Earning from PPC Search Engine Affiliate Programs

What are PPC Search Engines?PPC Search Engines are search engines... Read More

The Secret to Adwords Success

It seems at the moment that everybody is telling you... Read More

Successful Pay Per Click Ad Copy

Writing outstanding ad copy for pay-per-click advertising campaigns is critical... Read More

Finding The Cheap Clicks

As anyone who uses Pay Per Click (PPC) advertising in... Read More

Creating Revenue Without Much Effort, Set It And Forget It Online

Earning more revenue from your website is the goal of... Read More

Want Higher Adsense Earnings? Then Optimize Site Navigation

Webmasters know that Adsense generates a sizeable source of additional... Read More

When AdSense Goes AWOL

No matter how hard you work to optimize your page,... Read More