First of all, i am not an internet marketer. I am just writiing my views from the perspective of a customer. Browsing forums like digitalpoint for ebooks, has been one of my habits. I myself prefers to read ebooks or buy books online to going to the bookshop to buy books, because it saves time and its very convenient. Recently, i had been browsing through the forums for some ebooks and something caught my attention. Theres  a thread, someone is selling his ebook for just $1. WTF is that? Why is this guy pricing his products at such a low cost?

What has gotten into the heads of those internet marketers in dp? Pricing of products is a major factor that determines the sales. Customers normally won’t go for products that are sold at high cost. So, you might have thought, “Ok! i will price it at damn lost cost to attract more buyers” You might had done some simple calculations in your head.

Total revenue expected: $20000
Price of ebook initially:$40
So, you would have to sell 500 copies of that ebook to reach that target.

How many people are willing to pay $40 for an ebook? Maybe not much. So you lowered the price of the ebook. I agreed you should lowered it. BUT, heres what you done:

Total revenue expected: $20000
Price of ebook NOW :$1
So, you would have to sell 20000 copies of that ebook to reach that target.

You might had thought that by pricing it at just $1, you get definitely get more customers, and it will be easier to reach that target. You might be half right. But is it worth it?? Will you able to make more by pricing it at slightly higher price? Let me tell you how the customers think. By underpricing your products too much, you might get negative effects.

1. Your sales decline. Normally, people will believe those products are of low quality and they won’t buy it. They will have this type of thinking “This product must sucks! If not why are they pricing it at such low cost?”
2. You are not maximsing your profits along with the effort you had put in. ( you are selling something that you probably can sell for $20 for $1) You are earning 20 times lesser then what you should earn intially

So back to questions. Why do you think customers buy ebook for? As a customer, let me tell you this. Customers buy ebooks to learn more things, they go for quality content. And, you can be assure that, no matter how much the ebook cost, if its reasonable price, they will buy it. So by underpricing your ebooks at “$1″, will makes your ebook looks “cheap” and of low quality. And this is a serious problem because you know customers goes for quality.

Pricing a product may seems to be simple. BUT, in fact, it requires alot of brainstorming and research so as to maximise the profits. Pricing of a product might lead to your product sucess, but may also lead to failure. Thats what i thought..