When to Raise the Prices on Your Digital Products

Last week, I went on a vacation to Disney World and was on a tight budget. (It was my first attempt at "travel hacking"; you can read more here!) But there was one place where I threw the budget out the window and spent $80 on the most ridiculous things.

It was here:

Any guesses as to why I might drop $80 on regular old sunscreen and subpar pool toys?

Because this was a poolside shop!

The view to my left:

Price is just a number.

Price is relative to value.

How valuable is your solution to your customer? In this case, my middle-of-winter New Yorker skin was bright red, and my kids were begging for the shark sinkie toys every other kid had at the pool. And I forgot my sunglasses.

They could've charged $50 for the No Ad sunscreen, and I probably would've paid it. I needed the solution, and I wasn't about to leave the pool and waste an hour fighting crowds at the Orlando Walmart to get it.

So how do you know if your TPT products are valuable enough to raise prices?

Let's run through a quick quiz, shall we?

Is your digital product selling now? 

• Yes. This is something people are already buying, AND they love it!
• No, I'm having trouble selling it, or people aren't thrilled with their purchase.

How much competition do you have? What are their prices?

• I'm the only one with a product like this or one of a few offering this solution.
• There are tons of other solutions like mine. My customers have a lot of choices.

How important is your solution to your customer? (The most valuable problems involve saving time, saving money, and making money.)

• My solution helps customers save time on something they have to get done, save money, or make money. (ie: Progress monitoring tool in Google Sheets)
• My solution is nice to have, but it doesn't fix a pressing problem. It might save them time on something they're electing to do. (ie: Bulletin board posters)

How quickly will you solve the problem?

• Download, print, and go!
• The customer will need additional editing or planning to prepare for this activity.

How in demand is your solution in today's market?

• My customers are looking for this solution and need this solution TODAY. (ie: Digital products during COVID)
• My customers are looking for this solution and need this solution in the next three months or so. (ie: Back-to-school products in April)
• My customers are not looking for this solution, but they would love it if they knew more about it! (ie: A game you made up to help students learn fractions)

To be clear, none of these answers are bad or wrong. They can be used to determine how appropriate it is for you to raise your prices right now.

The top answer indicates you're ready to raise the price.

The bottom answer indicates you should keep your price for now, consider adding something to your product, or lower your price.

These are not hard and fast rules but guidelines to help you navigate this decision.

You can raise your price with ONE "yes" on the quiz above if you feel it's appropriate!

The most important thing is to be sure you're checking back on your sales and conversion rates. You should be converting at the same rate (or a little below) your conversion rates before you raised the prices.

Still feeling uneasy about raising those prices? Here are a few indicators that it's time:

You're spending time and money sending your own traffic to your TPT store.

If you're spending money on ads, paying for someone to write blog posts, or just spending a ton of time posting on social, you will want to raise your prices to be sure you're getting a return on your investment!

You have a warm audience.

If you're spending time building your e-mail list and have an engaged following of people interested in buying from you, you have likely built enough trust to raise your prices.

Going back to the poolside shop I mentioned at the start of this post, they can charge so much because of their proximity to the right customers.

By contrast, there were about 20 of these gift shops within a one-mile radius, with thousands of cars passing by each day, but I never saw more than two cars in the parking lot.

They have to charge much LESS because they have absolutely no trust (it's probably junk, right?), and they are not in front of the right, warm audience.

If you're feeling ready but nervous, try raising your price by a dollar. Pricing adjustments are always an experiment. Watch to see what happens and adjust again from there!

Need more support figuring out your business plan? I can help with deciding which business model to choose, what products to create, how to price them, and how to build a simple marketing strategy that will help you make money from the start. Grab the 3-Day Business Planning Challenge. It's the best $17 you'll ever spend with a workshop series and Business Plan template to help you get started.