Sep 01

Co-founder of Obox Themes. Designer. Racing driver when I have time. Crazy about cars. Love tech. WordPress is my bread and butter.

5 Tips on Pricing a Digital Product

Pricing your digital product is never easy, you have to factor in so many elements and more often than not you'll be wrong the first time. Here are some things to consider the next time you launch a digital product.


We’ve made some pricing mistakes in our time. In fact, a change in our pricing was once so bad that we almost lost the business because we were too scared to change it back. Luckily we did.

Since that day we’ve learned what we should and shouldn’t do. Some of it’s down to communication, some of it’s down to doing better math and all of it is down to experience.

Below are 5 quick tips on pricing your next digital product:

1. Start High

It’s way more difficult to go up instead of down with prices. If you start too low and later find out that you’re making a loss because of an unforeseen factor then you will have a hard time convincing your customers that they should pay more.

When we launched Obox Themes we started our pricing at $70 for a Premium WordPress Theme and quickly discovered that our customers weren’t willing to pay that much. With that feedback in hand it was easy to drop them to $60 without causing an uproar because… at the end of the day who doesn’t like a discount?

2. Stick to 7’s and 9’s

There are a lot of pricing theories out there which justify this point and based on our experience they’re right. We always used to price items with a ‘0’ at the end and things went well but when we changed that to a ‘9’ (eg: $49, $79 and $299) the uptick was obvious – almost 15% in fact.

The premise is that people view $80 to be exponentially more expensive that $79. We read left to right in the Western world and therefore the ‘7’ sticks in our minds more than the $1 difference. Do it, it worked for us.

3. Factor in the after sale costs

Often the cost of creating a digital product is not expensive. Many of us do it ourselves without any outside assistance which gives us the impression that what we’re selling is pure profit. If you think that, you’re wrong.

The biggest expense in the WordPress theme world at least is that after sales costs incurred in a sale. Many of you may be great a creating products but the real work comes in when you have to support that product and that is not always fun.

In order to make it fun again you may hire a person to help with support and that costs money. In order to factor that into your pricing consider their hourly rate and work out how many products you need to sell a month to cover that one person. To be safe we always consider the cost of that person x 1.5 as there may be instances where we need to hire more people over busy periods.

4. Be careful when copying competitors prices

The easiest thing to do would be to head over to your nearest competitors site and simply undercut them by a dollar of two right? Wrong.

You have no idea how they reached the pricing point that they did, their customers may be of a different demographic, their support costs may be much less than yours or their product requires no marketing at all.

It’s not simply a case of seeing what others are doing and duplicating that on your end. You need to study your market, work out your expenses, consider who your customers are and test the waters accordingly. By fast tracking that process you will never have a true understanding of why customers are buying your products or not.

5. Don’t be shy to raise prices

Raising prices is not the same as starting low. At some point in every businesses life there will need to be a price increase – be it because of inflation, expenses, market dynamics – prices will go up.

We increase our prices once a year and sometimes by up to 30%. Yep, our themes used to cost $29 and now they’re $79. So how did we do it without pissing people off? Communication.

Before every price increase we give a fair warning one to two months in advance. First we email our customers with a personally written email by Marc or myself explaining that reasoning and the timing. Then we blog and tweet about it soon after. Finally, a day in advance of the increase we give one final warning so to avoid any surprises.

With proper leeway we give our customers the chance to consider the implications and avoid any surprises. By keeping people informed you’re including them in the decision and minimizing the backlash. It’s not a popular thing to do but in our case it’s been necessary more than once and with good management it’s also been successful.

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