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Math Statistics Pricing Analysis Excel Article
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Common Pricing Structures for Internet Marketers
from:There are various pricing structures that Internet marketers use to price their products and services. While the inexperienced marketer may just pick a price that sounds good, far more consideration than that needs to go into your pricing decisions. In the following paragraphs, we’ll discuss some of the most common price structures in use today in the world of Internet marketing.
Cost Plus Mark Up
Some Internet marketers will figure out how much it cost them to create the product and then mark it up a certain percentage. This percentage will vary widely, depending upon how much the marketer had to invest, the perceived value of the product, and other factors.
Competitive Pricing
This is another popular way online and offline marketers price their products. They constantly measure what their competition is charging for similar products and then they make sure they are charging somewhere in the same neighborhood as the competition. Basing your rates on the competition’s rates is a popular way to do business. If you’ve ever spent much time looking for a traditional job, you have probably come across job listings that state that they pay “competitive” wages.
Tier Pricing
This kind of pricing often involves various versions of a product or service where the first tier might be the cheapest with the least amount of features, the next tier costs more and offers more value to the customer, and the third tier costs even more and offers the most features to the customer. There is no rule, of course, that there can only be three tiers but it is often common to see three. Depending on the product or service you are offering, this may be an option for you to explore. This works well with software and also works well with service oriented offerings.
Other Types of Pricing Models
Take a look around at what kinds of pricing models other Internet marketers are using and you will probably see a great deal of flexibility in these offers. You’ll see one-time offers, limited time offers, and introductory offers. You’ll see special offers and events, where the offer is limited not by time, but by the number of people allowed to sign up. This is especially popular when PLR (Private Label Rights) items are sold so the market doesn’t get over saturated. You’ll also find a limited number of customers allowed when coaching or special online courses are offered.
There really are no hard and fast pricing rules. Much of an Internet marketer’s expertise on pricing comes from trial and error, split-testing, and experience. Furthermore, while one pricing model will work just right for one type of product or service, it may not work well at all for another. That’s why it is important to understand the various pricing models you have available to you and decide which one will work for the particular project you are working on at any given time.
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