PSYCHOLOGICAL PRICING – Shopify Drop Shipping Tutorial
What is psychological pricing and does it make a difference when it comes to pricing products online? I tested tons of things online and these are my observations…
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I truly believe that psychological pricing is not that important….I’ve test many things online and I came to the conclusion that in the end, it is all about putting high quality products in front of the right people. If you do that, people will buy. Even if you change the price from $100 to $99.95 (psychological pricing), it probably won’t change much.
Of course it will help, and in most cases you will end up making more sales, but WAY TOO MANY PEOPLE are according too much importance to this. I would much rather have an amazing product priced at $100 than a bad product priced at $99.95. See my point?
If you go to Walmart to buy a TV and the TV is 1000 dollars instead of 995 dollars…Do you really think than the $5 difference is making that much difference? And I’m not saying it doesn’t mane ANY DIFFERENCE at all…I KNOW IT DOES, and they have a whole marketing department testing this stuff on a daily basis…BUT, in the end, you are buying the TV for other reasons than the price being $995. The psychological pricing just HELPS you make that decisions, but the decision was based on something else.
Psychological pricing is just a little extra that you put on your store, nothing more. I see a lot of newbies that are not making any sales, and they think it is because they were selling their products at $30 instead of $29.95….Chances are high that this is not the reason.
Again, E-commerce is all about the right product in front of the right audience. If you do that, you would be surprised by how psychological pricing has little effect on your sales…Don’t believe me? Just try it on your store. Pick one of your winners and change the price…You will be shocked by the results.
Now when it comes to luxury items, if you’re trying to position yourself as a high end brand you should not do that. Using psychological pricing could actually hurt you if you are trying to sell high end products.
If you go buy a Rolex, for example, most of the time they won’t use psychological pricing, they will just put like yeah it’s 5000 dollars or 10,000 dollars. Well that’s what I’ve found when I go to like super luxury stores, they tend not to do that kind of stuff…Again it really depends of your market.
Don’t expect that psychological will magically boost your conversion rate by 1000%…It doesn’t work like that at all. Again, E-commerce is all about putting the right product in front of the right buyer!
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