One of the first questions that often comes up when starting your online business along with a print on demand service is how to price your products.

Your first instinct is probably to go for a lower price than your competitors. If your products are cheaper than your competitors’, customers will choose you over them. Makes sense, doesn’t it?

And yes, this rule is true… as long as you sell a generic, non-value-added product.

For example, if you wanted to sell a plain white T-shirt, without worrying too much about its quality or style, you could afford to sell at a very low price (but always above the production cost).

But if you want to sell a unique and high quality product, don’t you think that exclusivity should be reflected in the price? After all, you have put an extra effort in the design and marketing of your product that you should be able to see reflected in your income.

In this article we want to help you price your products right. Whether you have just opened your store or you want to apply some pricing strategy to sell even more, this article is full of tips that will help you make the right decision.

Pricing for beginners: how to set prices in your store
Before you start selling, you will have to determine the price of the products in your store. There are several factors to take into account if you want to get it right, so take note!

Base price of your product
If you have gone through our Catalog, you will see that our products are already priced in euros or dollars. This is what we call the Printful price, and it is what we will charge you for the management of your products.

Always keep this price in mind, as it is the base price of your product and will be charged to you in any case when your customers place their orders.

Derived expenses
In addition to the base price of your product or service, there are other factors to consider when setting your prices. These may only add a few cents to your final price, but it is important to take them into account if you want to avoid losses in the long run.

Some of these factors include:

Design costs: Have you hired a designer to help you with your designs? Or maybe you’ve downloaded some professional design software for which you pay a monthly fee?
Ecommerce platform costs: Does your ecommerce platform charge you a monthly fee, do you have to pay per transaction or per published product?
Web expenses: Have you paid for the hosting of your website? Or maybe you have hired someone to help you to set up your online business?
Advertising expenses: How much are you paying for your ads?
The best way to estimate how these overhead costs affect the selling price of your products is to estimate: How many products do you think you will sell per month? How many sales do you expect to make with your ads? Do you sell only one type of T-shirt in your store, or do you have a whole catalog of products?

Divide your expenses among your products according to the time or investment you have dedicated to them or any other principle you consider important. Give yourself time to think about this part!

Your profit margin
This is the interesting part of your product pricing: your profit margin is the money you can keep after selling your product.

It is important not to mix up your profit with the expenses derived from your product. After all, the latter are investments you have already made to run your business, and you should recover them with the sale of your products. Always keep them in mind and separate them from your profits!

Setting your profits is entirely up to you, but be careful! They should be in line with your marketing and how you present your products to your buyers.

It is entirely possible to make great profits with your products if you clearly highlight their exclusivity and quality. That’s precisely what the big brands do! We’ll talk about it later.

However, if you are looking to target a more low-cost audience, you can naturally attract them with a lower profit margin that implies a more affordable selling price.

Taxes
Last (but definitely not least), you will have to take into account the taxes you will have to pay on your sales.

Taxes vary depending on your situation and the country you live in, so it is important that you are well informed about the exact amounts you will have to pay and how to do it.

There is a section in our Help Center where we explain how taxes work in relation to Printful. Check it out before you publish your products or share it with your consultant to make sure everything is clear.

Now you know the factors to consider when setting a starting price for your products, so get to it!

You know, you can play with your profit margin until you find a price that works well with your market segment, but always keep in mind the production costs of your product and your other expenses!
There is no exact formula to help you with this part, so take your time, try various prices and find out which number works for your business.

Pricing strategies for your online store
Once you’ve decided on the selling price of your product, you can start thinking about pricing strategies for your store – your selling prices don’t have to be final! You can play with them to make your products more attractive according to your strategies and promotions.

Pricing strategies are marketing tactics with a touch of psychology that help you sell once your products are published in your online store.

There are many strategies you can apply, and you can combine them as you like! Here is a selection of the best pricing strategies for online stores that you can apply to your business:

Pricing strategy for a product line
You already have a target price for your product – with this strategy, you’ll make it look like a bargain!

The key to this strategy is to offer similar products at different prices. For example, you can offer three T-shirts with different designs and charge a different price for each of them (always within a range and taking into account all the points we have given you before). The price at which you really want to sell your T-shirts will be the intermediate price.

Normally, your customers will choose the product with a central price. According to Kotler, your visitors will associate different levels of quality to your products according to the prices you give them, and will tend to opt for the average price.

Market penetration strategy
This strategy is especially interesting if you have just opened your online business and are just entering the market.

Set a low price for your products when you launch your online store (but one that covers costs!) and, once you reach a good enough sales volume, start raising your prices little by little. This way, you will have accessed your market and will be able to make the profits you want in the long run.

Price skimming strategy
If you already have a store but have just introduced a new product, price your latest addition higher. This way you can take advantage of the first few days’ pull to make more profit (and cover the design costs of your new product). After that, reduce its price to your usual ranges. This practice is known as the price skimming strategy.

Then, as the life cycle of your product progresses, you could even continue to lower its price and add it to a specials or discounts section on your website. This way, your customers will always have a bargain section and will come back regularly to see what’s new!

Prestige pricing strategy
As we mentioned earlier, it is entirely possible to add a high markup to your products and get your customers to pay for them. In fact, by doing so, your consumers will assume that the quality of your product justifies its cost. But beware! This strategy requires some conditions:

Your niche market must be small and have the economic capacity to pay for your prices.
Your product must meet their expectations of quality and/or exclusivity, in addition to satisfying their needs.
You must make sure that competitors cannot easily emerge.
If you think your products meet all these characteristics, go for it!

Free shipping strategy
Nobody likes to pay for the shipping of their products, and your customers probably don’t either!

This strategy consists of covering the price of shipping in the selling price of your product. This way, you can advertise in your business that shipping is free, and your customers will be able to make their purchases without worrying about unexpected expenses.

Another good option is to offer free shipping for a certain amount of money or more.

This strategy is perfect if you offer products with very different prices, such as T-shirts and accessories.

To implement it, look at the average selling price of your core product. For example, if the core product of your business is t-shirts at €18, and you also offer bracelets at €5, you can offer free shipping from €20 onwards. Your potential customers will prefer to spend a little more money but get an extra product rather than pay for shipping.