Ways To Make Money - Finding Your Magic Price Point

One of the ways to make money, is by making sure that you have the right price point for your product or service. Have you ever puzzled why all those merchandise on TV cost $19.95? Why used automobile dealers,excuse me, "pre owned" car sellers supply $199 a month?

It's an often used and very successful marketing concept. The idea is that certain numbers set off alarm bells in a buyers mind and by shaving a penny or two off the price we can avoid these alarm bells. A person will wrinkle his brow and wonder if that fancy kitchen gadget is worth $20, but he will be readily dialing the phone credit card in hand for the low low price of $19.95. What a bargain.

Imagine it or not sales figures seem to support this idea. Shave a few pennies off the round dollar amount and people are more likely to purchase from a TV ad, however this doesn't work in all types of marketing.When buying in individual folks appear to favor round figures. For instance. I have a good friend who sells knockoff tennis shoes at flea markets. Do not laugh. He quit his job as he makes more in a weekend at the flea market than he did in a 40 hour week.

Anyway he discovered that the magic price for knockoff tennis shoes at a flea market is $20. Any more and buyers huff and go "I might as well go to the shoe store for these prices." Any less and they question the quality of the shoes, Look them over again and again, then walk away without buying.

I won't make a comment about peoples' behavior. The object is to make sales, not judge your customers, right? The simple truth is for every product and service there is a magic cost that a customer will readily pay with virtually no promoting in your part.I will not even attempt to guess why, however for e books that value seems to be $7. You have most likely seen the rash of $7 dollar e books everywhere. On advertising web sites and blogs and all around the web. For some unknown reason $5 is just too low and 8 $ is just too high.

Does it actually matter why? As entrepreneurs, we need not ask why. We find ways to make money with something that sells, and stick with it until it doesn't sell anymore. If the public can pay $7 with out flinching who am I to ask them? Perhaps it is because $5 isn't a lot of money these days. So if it costs $5 it must not be any good or it could cost more. But then $10 is double digits. Maintain on right here $10, I may get two quick meals lunches for that.Okay, I am guessing why, however the point is, $7 is the magic price for an e book. At least for now it is.

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