Have a Shopify store?
Or perhaps you’re considering launching one?
If so… something you’ve probably thought about is the best way to price your products.
We primarily do and teach a dropshipping model, for people starting/growing stores.
So there’s two considerations:
#1: You don’t wanna price your product so high, that no one buys it.
#2: You don’t wanna price your product so low, that you have no margins built-in to make a profit.
Here’s the truth…
The only way to get real answers, is to test.
And to test, you’ve gotta spend money and let the data give you answers.
To succeed with paid ads, you MUST view it as buying data… NOT as losing money.
This mindset shift is necessary if you want to succeed with your store.
But once we get past that point, run ads, and make sales… what happens next?
What if a product is selling well and making a profit?
It’s natural to ask yourself… “Hmm, could I raise the price and make even MORE $$?”
Recently, I decided to put to test that theory.
Here’s What Happened
In one of my stores, we have a product that sells for $39.95.
So after a few days of solid sales, I got brave and raised the price to $69.95.
Yes… I know that’s not exactly double the original price, but with shipping costs, it basically comes out to almost double.
I don’t really have a good reason for why I did it.
The product was selling well, and I just felt the perceived value was high and we could perhaps get away with a price increase.
You don’t know unless you test… right?
So I raised the price and everything went smooth, of course…
My Add to Carts dropped, no sales came in, and after about 48 hours, I realized my test was a dud.
So what did I do?
Did I close my store down??
Did I sell an old jacket on eBay to make up for the ad spend I lost??
Did I swear off Facebook ads forever??
I simply changed the price of the product back to $39.95 the next morning.
And what happened next was SHOCKING.
(Not really, but every story needs a good climax.)
YES, my test was a failure.
But once I reversed the price, and sales started flooding in again.
The important takeaway here, is that I view ad spend as an INVESTMENT.
If I just viewed it as an “expense,” it would be easy to beat myself up about the money lost when I tried raising the price.
But I tried, saw it didn’t work, and adjusted back.
I was simply buying data.
Otherwise… I never would have known if a higher price point would work.
Instead… I tested it, and let the data answer that question for me.
I want to end this post with an EYE-OPENING concept.
A concept that shows you the power of paid advertising… especially when you view it as an investment in your business.
See… as we discussed before, most people are “scared” to spend money on ads.
They view it as an expense… a “loss” they will never get back.
But imagine this…
Let’s look at a scenario where you spend $1000 on ads and get zero sales.
That’d be pretty demoralizing, right?
It’s unlikely that would happen… but imagine it did.
You’re down $1000.
You’re ready to give up, close your store, and go home.
But the very next day, you spot a trend in a campaign.
So you test a new angle on the product, and suddenly it starts doing a 3.0 return on ad spend.
$1 in… $3 out.
$100 in… $300 out.
$1000 in… $3000 out.
If you do the math, you’ll quickly see how fast you can wipe out that initial $1000 in spend.
We see this scenario play out all the time… where someone will struggle to find a product that sells well, then suddenly something TAKES OFF, and makes up for all that previous ad spend.
But if you just view ad spend as “losing money,” you might never give yourself the opportunity to get to this point.
These are the concepts no one explains when you’re starting/growing a store.
All you see is hype, and how “easy” everything is.
I’m here to tell you it’s not easy… but you can make your life a lot simpler, by understanding and embracing these principles.
So do me a favor…
Ignore the clowns you see in your newsfeed talking about how you can build a successful business with $5 in ad spend.
Start viewing yourself and your business differently.
Focus on the big concepts, like viewing data as an investment instead of an expense.
These mindset shifts will take you from an internet “hobbyist” to an online business owner.
And if you need help along the way, click the banner below and let’s explore how we can help.