Questions

Is there a theoretical pricing formula? If i offer the product at $0.99 i could probably get 10K buyers. How would that change if i offer it at 5$?

There's a few way to do pricing, and you need to consider a few things, but three main things are: costs, competitors, value.

Costs are pretty self-explanatory, you need to be sure you're not going to lose money. Don't consider just the hard costs, but any soft costs as well, what's maintenance going to be, human costs, opportunity, etc.

Are there things similar, what do competitors charge? How you price against them is a positioning of your overall brand and relates to value. Are you a premium product, or a commodity?

Value speaks to how your audience views it. You say potential audience, but do you have access to it ahead of time? You can come up with a better educated guess on what to start a price at by polling a sample size and ask a few questions: At what price is this product too expensive you won't buy it? At what price is this a good deal? At what price is this too cheap and something must be wrong with it?

A/B testing price is always tricky when it's for the same product, especially if it's a published price and the target audience will talk to each other. If it's not published, then it gets easier and not so bad to A/B.


Answered 8 years ago

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