The Importance of Price Points

When pricing your products, price points are vitally important. Something as little as one cent can actually make or break a sale for you.

Price points are purely psychological, but it has been proven time and again that price points used correctly are successful. So, what does this all mean?

Each ten dollar mark is considered a price point. And that ten dollar mark should be avoided at all costs, because each time a price goes up past a price point, there is an added increase of buyer resistance.

For example, $10 seems much more than $9.99, even though only a penny separates the two. Because with $9.99, people think it is under ten dollars, which is considered more in line with "spare change". But suddenly when the price is $10 or $10.95, it seems so much more, and they begin thinking of what else that $10 could buy.

But what if you want $12.99 for each item you sell? Try selling it at $9.99 plus shipping & handling of $3.00 You get below the price point, but you still get the amount you want to.

If you run specials or deals, change that last number. For example, WalMart uses .97 (some say to be sure they offer the lowest prices against other retailers who round out their prices at .98 or .99). This will show customers the deals and help you keep track as well.

By keeping price points in mind when pricing your products, you can help maximize your sales and avoid those $10 price point marks.

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