How to Price Your Digital Products: A Beginner’s Guide

When starting your digital product business, one of the key decisions you’ll face is how to price your offerings. Pricing can make or break your business—set it too low, and you risk undervaluing your product; too high, and you might scare away potential customers. In this post, we’ll walk you through the essential factors to consider when setting prices for your digital products.

1. Understand Your Market

Before settling on a price, take the time to research your market. Look at competitors in your niche and analyze their pricing strategies. Do they offer tiered pricing? How do they package their digital products? While you don’t have to mimic exactly what others are doing, understanding industry norms will give you a benchmark.

If you’re new to researching competitors, tools like Google, industry forums, or social media platforms like Twitter or LinkedIn can be a great start. Remember, pricing varies significantly by industry. For instance, an eBook in the fitness niche might cost differently than an online course on graphic design.

2. Factor in the Perceived Value

Perceived value plays a huge role in digital product pricing. Since digital products often have no physical form, the perceived value helps customers determine whether a product is worth their investment. To increase the perceived value of your product, focus on quality—both in terms of the product itself and your branding. Beautiful design, clear descriptions, and compelling packaging can help you justify a higher price.

For example, when you create your online shop with OkehShop, make sure your product pages are well-designed and professional. Clean, visually appealing images and concise descriptions will increase the perceived value of your products and give customers confidence in their purchase.

3. Consider Your Costs

While digital products often have lower overhead than physical goods, there are still costs to account for. Think about the time and resources you’ve invested in creating the product. Did you use premium software or hire a designer to help you? Even though these aren’t direct material costs, your effort and any external help should be factored into your pricing.

It’s also important to think about ongoing costs like marketing, platform fees, or any tools you use to manage your online shop. For instance, with OkehShop, you can easily set up your store and avoid many of the higher fees associated with other platforms, but any advertising or promotional costs should be accounted for.

4. Use Tiered Pricing

Offering multiple pricing tiers is a fantastic way to cater to different customer segments. For example, you could offer a basic version of your product at a lower price and a premium version with added features at a higher price point. This can help you capture more sales, as customers with different budgets can choose the option that best fits their needs.

A great example of tiered pricing is when selling an online course. The basic package might include only the course material, while the premium option could include additional resources like one-on-one consultations or exclusive downloads.

5. Test and Adjust

LPricing isn’t set in stone. After launching your digital product, monitor your sales and customer feedback. Are customers buying at the current price point, or do you see a lot of abandoned carts? Are you receiving feedback about the product being too expensive or too cheap? Use this data to adjust your pricing strategy as needed.

A/B testing can be a powerful tool here. Try offering your product at different price points for limited periods and see how it affects your sales. Just remember to communicate clearly with your customers if you’re testing new prices—no one likes sudden price changes without an explanation!

6. Don’t Undersell Yourself

It’s common for new entrepreneurs to undervalue their digital products, especially when starting out. But underselling yourself can hurt your business in the long run. Customers often associate low prices with low quality, and you might find it harder to raise prices later on.

Confidence is key. If you’ve put time, effort, and expertise into creating a valuable digital product, don’t hesitate to charge what it’s worth. It’s often better to start at a higher price point and offer discounts if necessary, rather than starting too low and losing revenue.

Wrapping it all up

Pricing your digital products effectively can feel overwhelming at first, but with some research, strategy, and testing, you’ll find the sweet spot that resonates with your target audience. By considering your market, costs, perceived value, and using smart pricing tactics like tiered options, you’ll be setting yourself up for long-term success.

With platforms like OkehShop, you have all the tools you need to not only create but also price and sell your digital products confidently.

• Want to learn more about digital product ideas? Check out this post on finding your digital product idea.
• If you’re just starting out, here’s a helpful guide on how to create a digital product.