I spend a shit ton of time reading about this stuff, and these two articles are just fucking fantastic:
Perfect Pricing Part Deux — More money from fewer sales by @ASmartBear
Will Low Prices Help You Sell More? (Biz Book Friday!) « Unicornfree
The basic idea they're presenting is: Supply and demand does not exist for digital products as there is no tangible product or upper limit to supply (someone buying your ebook or subscription product doesn't reduce supply in the market). As market pricing is dependent on supply and demand, market pricing is an inappropriate model to follow for pricing digital products and you should instead be using Value Pricing models (prices determined by the value the customer derives from the product).
My favorite excerpt from the asmartbear post:
Discuss.
Also, inb4 "markets 4 lyfe" and "the market is the sole determiner of value" bullshittery begins
Perfect Pricing Part Deux — More money from fewer sales by @ASmartBear
Will Low Prices Help You Sell More? (Biz Book Friday!) « Unicornfree
The basic idea they're presenting is: Supply and demand does not exist for digital products as there is no tangible product or upper limit to supply (someone buying your ebook or subscription product doesn't reduce supply in the market). As market pricing is dependent on supply and demand, market pricing is an inappropriate model to follow for pricing digital products and you should instead be using Value Pricing models (prices determined by the value the customer derives from the product).
My favorite excerpt from the asmartbear post:
Choosing a pricing strategy based on competition is a natural approach, but also a flawed one. Price competition implies scarcity—supply and demand market forces. There is no scarcity for ebooks because digital files are replicated practically for free. And let’s face it: when learning about a topic, we often buy more than one book about it. I’ve heard from several customers who bought both mine and Sacha’s books. So, market forces might now matter when it comes to pricing an ebook.
Competition on price also implies that the content of your ebook doesn’t matter. Following this flawed assumption, customers would rather buy the cheapest ebook because they just want a deal and don’t care about what’s inside. This just isn’t true; tech professionals are looking to learn about design, not grab the cheapest book available. Every book contains unique ideas and benefits.
If you begin a business by thinking about price, you have already lost. Customers do not buy because of price; they buy because of the value they receive. Without value, the equation is broken.
Discuss.
Also, inb4 "markets 4 lyfe" and "the market is the sole determiner of value" bullshittery begins