{"id":1774,"date":"2016-10-19T04:23:56","date_gmt":"2016-10-18T22:53:56","guid":{"rendered":"http:\/\/www.intelligencenode.com\/blog\/?p=1774"},"modified":"2026-03-30T13:38:57","modified_gmt":"2026-03-30T08:08:57","slug":"is-there-such-thing-as-the-right-price-for-your-products","status":"publish","type":"post","link":"https:\/\/www.intelligencenode.com\/blog\/is-there-such-thing-as-the-right-price-for-your-products\/","title":{"rendered":"Is There a Such Thing as ‘The Right Price’ for Your Products?"},"content":{"rendered":"

What is it that makes the average shopper transition into a customer? The trouble for many store owners lies in trying to determine the best price for their products. Retailers understand they need to make a profit to stay in business, but what is that sweet spot that will keep the customers happy, and keep your numbers in the black? Here’s a quick guide to setting the right product price:<\/span><\/p>\n

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The First Part of the Equation<\/span><\/h2>\n
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  1. Your costs of acquisition<\/span><\/i> \u2013 <\/b>How much are you paying to get the product into your inventory? You likely already know that retail price<\/a> less wholesale price is the generally accepted formula for determining profit, but it’s only a piece of this puzzle.<\/span><\/li>\n<\/ol>\n
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    1. Costs to maintain inventory, promote, and distribute the product <\/span><\/i>\u2013 Storage, marketing, and shipping of the product can have a serious impact on a product’s profit margin.<\/span><\/li>\n<\/ol>\n

      Finding the Sweet Spot for Pricing<\/span><\/h2>\n

      After determining the baseline profit from the factors above, now it’s time to find the happy medium between maximized profits, and customers that will buy, and keeping them coming back for more.<\/span><\/p>\n

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      1. Start with the Manufacturer Suggested Retail Price (MSRP)<\/span><\/i> \u2013<\/b> Just like it sounds, this is the price the manufacturer suggests you sell the product at.<\/span><\/li>\n<\/ol>\n
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        1. Look at your top competitors that are selling the same or a similar product<\/span><\/i> \u2013 Although you may be unable to tell if anyone is <\/span>actually buying<\/span><\/i> at this price, you will at least know where your competition stands in terms of pricing.<\/span><\/li>\n<\/ol>\n
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          **Insider tip: IntelligenceNode\u2019s software will help you <\/b>systematize your competitive pricing process<\/b> and automatically price your goods above or below the competition.<\/b><\/p>\n<\/blockquote>\n

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          1. Consider psychology in pricing<\/span><\/i> \u2013 For example, if you have a product you are considering selling for $10, sell it for $9.99 because the mind can justify a purchase more if it’s less than the larger dollar amount. Yes, it’s just a penny, but because it’s less than $10 our brains see it as more of a deal. A price<\/a> ending in the number 9 also yields more demand, as was found in a study published in <\/span>Quantitative Marketing and Economics<\/span><\/i><\/a>.<\/span><\/li>\n<\/ol>\n
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            1. Don’t over price, but don’t under price either<\/span><\/i> \u2013 When a product feels \u201ctoo cheap<\/a>,\u201d customers consider it to be lower quality. Yet, overpricing leaves customers feeling duped. This is why keeping an eye on competitor pricing<\/a> is so important. You want to be slightly cheaper, but not too much cheaper because then you’re giving the impression of cutting corners. Even if you are simply taking less profit, the perception is key. If you’re pricing higher than your competition, it should be justified with something like free shipping, or fast delivery to avoid losing the sale.<\/span><\/li>\n<\/ol>\n
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              1. Know your target audience<\/span><\/i> \u2013 Consider who is buying your product? For example, college students are usually strapped for cash which could cause them not to buy. However, an elderly customer may be just as strapped for cash if they are saving for retirement. Who is your <\/span>ideal customer or persona<\/span><\/a>? Are they flush with cash? Are they looking for a great deal? What are their top priorities? What makes them need the product you’re selling? Honing in on your perfect shopper could help you determine the best price.<\/span><\/li>\n<\/ol>\n
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                1. Keep up with market trends<\/span><\/i> \u2013 If there is a surge in demand\u00a0or a sudden standstill to your sales, you should already have some insight as to why. Keeping up with market trends will help you to determine if you should be raising or lowering your prices. Your competitors are also likely watching the market, making it that much more important to stay up to date.<\/span><\/li>\n<\/ol>\n
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                  1. Consider split testing<\/span><\/i> \u2013 Split testing could be your quickest way to determine the right price for your products if you’re struggling to decide. This is especially helpful if there aren’t many competitors for the product in question. Create two landing pages with two product prices, and run ads to both. Which ever one gets the highest conversion is likely the best price.<\/span><\/li>\n<\/ol>\n

                    Other factors that can be used in setting the right product price include things like:<\/span><\/h2>\n