Maximizing Your Profits With Print-On-Demand Pricing Strategies in 2023 – (A Complete Guide)

One of the most important considerations you’ll make as you aim to increase sales in your print-on-demand businesses is how to price your products. Price is a major issue for customers and pricing strategies play a major role; in fact, it is one of the primary aspects that consumers will evaluate when deciding whether to buy from you or one of your competitors.

It’s also worth mentioning that pricing is frequently one of the first things an internet consumer sees, even before reviewing the product’s full specifications. As a result, misjudging the price might turn off customers before they ever give your products significant thought.

Pricing a product correctly can make or break the success of any firm, large or small. Prices that are too high will discourage potential customers and lead them to the competition, but prices that are too low will throw a firm into the red.

Finding the best pricing requires a specific strategy tailored to your brand. Pricing a product or service must take into account costs as well as what the market will accept. The market, or customers, decide how much a product is worth and will only pay a certain amount.

Product pricing involves a variety of tactics, measures, and methodologies. It is critical to establish a pricing point that would secure your market position, provide prospects for growth, and satisfy customers.

Business owners must find an appropriate pricing plan. Product price is continually changing and is determined by a variety of measurements and factors. Here are some things each entrepreneur should think about before deciding on pricing for a product.

The Primary Audiences:

Understand your customer. What do they expect to get from the product or service? Do they choose the lowest alternative, or do they believe that price equals quality? How important is pricing in their purchasing decision?

Fixed Expenses:

Consider fixed expenses, if any exist. These are costs that remain constant regardless of the number of products sold. Merchants must price their product to offset these ongoing costs.

Market and Competitor Research:

There is no purpose in charging much more than competitors unless there is a compelling reason to do so. Pricing products based on existing price points for similar products that are already popular among the target demographic.

Costs That Fluctuate:

These are variable costs, as opposed to fixed expenses. Consider the expenses of product development and fulfilment. This is the amount of money that merchants spend to manufacture and sell their products.

Profitable Margin:

This figure shows the portion of the sale that has been converted into profit. Consider how much profit you want to make per sale. While there is no hard and fast rule, a reasonable profit margin is often between 10% and 30%.

Where Should I Sell?:

Where will you advertise your things for sale? Online, at a physical store, or do you have other options? Because this decision will have an impact on fixed expenses, it must be carefully considered.

On-Demand Pricing Strategies

Print-on-demand businesses can use a variety of pricing strategies. Here are a few examples:

Selecting the Specific Pricing Strategy

Products with beautiful, round pricing, like $30 or $80, are common. While these attractive, round figures make it easy for customers to conduct some mental math, adding up the entire amount of their order in their heads, some customers may be suspicious of these figures. Some customers are concerned that these round numbers reflect a high markup; in other words, they are being charged far more than the product is worth.

Giving a super-specific pricing, such as $29.34, on the other hand, may assist buyers to consider the cost as more rational and acceptable. They may believe that these more accurate figures imply a more thorough value of the product.

This method isn’t appropriate for every on-demand merchandise, but it has shown to be beneficial among print-on-demand businesses catering to “techies,” B2B customers , and other logic-driven consumers.

Get A Loss Leader Strategy

“The loss leader strategy has shown to be quite effective, not only among print-on-demand firms but also among businesses in general. In reality, retail behemoths like Amazon frequently employ the loss leader strategy.”

What exactly does this procedure involve? Essentially, it’s all about attracting customers with a low-cost product, but then growing revenues via well-targeted upselling and cross-selling.

For example, you may tempt people to your business with the promise of an extremely cheap tote bag but then compensate by offering bespoke T-shirts, caps, water bottles, or books, to fill that tote bag.

The main idea is to make people believe you’re losing money on a certain item when, in reality, you’re only utilizing that item to lure them to your store to look around.

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Costly Products Strategy

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Here’s a print-on-demand pricing technique that makes use of some fundamental human psychology. When displaying a row of products, always place the most costly one on the left. Ideally, there will be a substantial gap between this product and others that follow it.

Simply said, starting with your most costly offering will make all of the things to the right look like steals!

The Benefits of Psychological Pricing

  • Increases interest in your products
  • Reduces the complexity of decision-making
  • Provides a high rate of return on investment

Combine or Sell Bundle Products Strategy

Bundling is another tried-and-true strategy that print-on-demand firms might explore. Offer options for customers to save money while placing larger orders.

You’ve probably seen this strategy used by several online shops. For example, Product A costs $50 on its own, but Product B costs $65 on its own… However, if you purchase both, the total cost is only $100.

This is an excellent approach to cross-sell while giving your customers the impression that they are saving money. The major advantage of this strategy is that you may effectively set the rates you desire while keeping customers satisfied. You may be able to persuade a conservative customer to spend more than usual since they will believe they are receiving a fantastic bargain.

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Price Skimming Strategy

On the other hand, you may apply a price skimming technique and start with high prices and then gradually drop them.

Price skimming is a successful strategy for attracting trendsetters and influencers who want to be among the first to experience new products and services. This can increase consumer interest in products while also making high-income customers loyal members of your client base.

This happens all the time in the world of smartphones. Because new iPhone models are so fashionable when they first come out, they may cost about $1,000. They gradually grow more inexpensive to the general public, reaching people of all economic levels.

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Another advantage of price skimming is that you will soon recover your manufacturing costs rather than experiencing an initial loss.

Price skimming doesn’t work as effectively for organizations that provide professional services, such as accounting firms and business consultants, because demand isn’t as strong. Subscription-based businesses, such as meal kit services and SaaS firms, may struggle to implement this model since high initial pricing discourages customers from making long-term recurrent payments.

Price skimming, on the other hand, can be effective in businesses that rely on trends, such as technology and fashion, or in industries with extremely high production costs, such as medicines.

Provide Comparable Things At Slightly Varying Pricing

When browsing for on-demand merchandise, customers may face analysis paralysis. They won’t be able to choose between, say, ten different T-shirt alternatives that are all the same price. That usually implies they’ll just leave.

As a result, by providing some pricing distinction, you may assist your customers in making a selection. Even little differences of a few pennies might have a significant impact.

Premium Pricing Strategy

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When your target audience is mostly elite buyers, charging higher costs — without a strategy to dramatically cut them — might make your brand more appealing. A premium pricing strategy is all about charging more than your competitors to differentiate yourself.

Premium pricing may convey a sense of luxury and reinforce the notion that you are a brand name, while also providing the impression that you have the highest quality things to offer. When shopping for a t-shirt, for example, many people pay an extra dollar or two to get Zara or Mango. Although all other alternatives operate precisely the same.

This pricing plan is only effective if you know your customers will not be put off by high charges, but it may swiftly boost your perceived worth.

Reasonable Pricing Strategy

If you’re primarily targeting price-sensitive customers, you might want to pursue a competitive pricing approach instead. With this method, you will continue to maintain your pricing lower than those of your competitors. To maintain their loyal customers, brands such as Best Buy and Target provide price match promises, even when rival retailers are having deals.

This technique is frequently combined with economy pricing, in which businesses focus on keeping manufacturing costs as low as possible to give the best pricing feasible.

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While a competitive price will not make your business seem unique in any way, it will help you win over customers who are looking for a consistently reasonable offering.

Pros of Reasonable Pricing

  • Simple to use and calculate
  • Low risk, puts you in line with the competition
  • Evolve with the market, altering prices as necessary.

How To Set The Product Price?

Now that you’ve considered all of the relevant factors, algorithms, and pricing tactics, it’s time to determine the price. And here’s how to accomplish it in five easy steps.

Determine Your Target Market

Determine the exact set of buyers who will most likely buy your product. Businesses may gauge demand and adjust prices to better fulfil customer demands by defining their target demographic and buyer profiles.

Create client profiles based on their age, gender, income, geography, and other characteristics. Investigate their hobbies, lifestyle, everyday difficulties, interests, and concerns, and position your product as the ultimate answer and point of interest.

Analyse the Market and Competitors

When entering a market with an existing product, it’s important to look into the pricing points for comparable or identical products supplied by competitors. When it comes to similar products, customers have definite expectations, and your prices should match them.

If they differ significantly from the competition’s offers, there should be a clear reason for this. What distinguishes your product? What makes it unique? When it comes to eCommerce and online sales, always assume that buyers are aware of the prices charged by rivals for the same or comparable product.

Calculate Your Costs

Entrepreneurs must cover both variable and fixed costs that contribute to their product to achieve success and profit. Fixed expenses are fees that do not change, such as premises rent, insurance, and taxes.

Variable costs might vary based on the number of products manufactured. Variable costs include labour, raw materials, and other expenses. Keep in mind and calculate all of the costs associated with product delivery.

Choose a Pricing Strategy

Our pricing strategy guide comes in handy here. Consider the above-mentioned elements, as well as expenses and where you want to market while deciding on the best approach for your products. As a brand grows and expands within its business, it must modify its pricing methods.

Consider all of the above-mentioned pricing plans and examine their use, applicability, and suitability for your firm. Consider your expenses, profit margins, competition, current market trends and demand, and, most crucially, your customers, since they are the ones that drive your business and make profits.

Eye On The Results

Beginners and small firms require time to analyze the genuine market value of their products. To achieve long-term success, businesses must monitor sales and determine whether the given price matches what customers are prepared to pay. To keep up with demand, prices may need to be reduced or increased.

To build a dependable consumer base, you must stay current with market trends. Take note of competing prices, but most importantly, of the customers. Your product will have a healthy and profitable lifespan if you consistently fulfil their wants and sustain the essential cash flow.

Keep Your Prices Smart

Every business needs excellent pricing tactics to maintain high-profit margins while minimizing demand. You may capture your customers and keep them loyal to your brand if you have a sound procedure for pricing each of your products or services. You’ll be confident in the prices you set for your products.

Pricing is rarely an easy or quick procedure. Pricing strategies and price points may work together to assist you to choose the best price for your brand positioning, market, and perceived value to maximize profit margins while maintaining consumer loyalty.

Once you’ve determined your pricing strategies for your next launch, it’s time to sell your products and start getting people to buy.

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