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Are you having a headache about how to price your products? Here’s a great method for you to get comfortable profits while attracting more customers!
In this episode, Willy is going to cover:
- The most comfortable pricing range for your products;
- What are the profits you can get from pricing at this range;
- Why this range works and how you can scale your profits further.
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Hi everyone! This is Willy and once again welcome to Win it with Willy Lin! And in this episode, I will be talking about: What is a Comfortable Profit Range to Have When Selling on Amazon?
So firstly, after selling over 1000 different products on Amazon right now, my team will always follow the USD$25-$50 price range.
That means, I cannot have products that are selling lower than $25 as Amazon’s fees will eat up my profits, or I try not to have products that are above $50 as it might be too expensive to sell.
The $25 to $50 price range is a price range that people will just buy without thinking so much, without Googling for that brand. They are comfortable with that range and they are back up by Amazon’s 30-days money-guaranteed (policy). No questions asked.
But of course, you might say: That doesn’t mean you will make money selling at that price, because it comes down to your costs.
Long story short, our team will make sure we make at least $10 profit after deducting all the product costs, shipping costs, prepping costs.
That $10 profit is of course the gross profit, but if you are not able to hit $10 at the gross profit level, then your net profit will certainly be extremely low or even go into deficit.
But you might say: “Hey Willy, what if I am selling a product at $50, should I only aim for $10 profit too?” Because it seems to be pretty low for a product selling at $50.
Well, you can start from there at $10 profit then move upwards. In terms of percentage, our team will hit for 30% profit – 40% profit, thus if you are selling a product at $50, you can start at $10 profit in dollar amount first, but you will want to aim to make at least $20 profit (eventually).
Higher gross profits will give you more of a bandwidth to do a lot of things like hiring experienced marketeers, invest more into scaling campaigns, product improvement, for example.
And when you do all of that, you will be sure that you can sell at a higher price point and thus make higher profits from there!
Alright! That’s all in this episode! Stay tuned for the next episode.