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Original Pricing
50 for $50
100 for $90
I have a product that sells for 50 pieces for $50. These 50 pieces weigh just over 1/2 lb.
I have a large size version of that product that sells 100 for $90 pieces. These 100 pieces weigh 1.1 lbs.
So here was the issue, if you ship using the post office, anything under 1 lb ships first class mail for around $3. If it goes over 1 lb, it must go Priority Mail, about $8. So that 1 ounce is costing me $5 in shipping.
So my original solution was to lower the weight to below 1 lb by selling 90 pieces instead of 100. So this is what my offer would have looked like:
50 for $50 ($1 a piece)
90 for $80 (The public instantly knows that this is under $1 a piece)
This solved my $5 extra shipping issue.
However, I ended up going with a different solution. We know that the public expects to pay less per piece as the quantity increases right? I purposely want to give them easy math. I've always been using the price to govern the easy math. But what if I used the quantity instead.
So here's what I did.
50 for $50 ($1 a piece)
110 for $100 (The public instantly knows that this is under $1 a piece)
The public feels like they are getting 10 free pieces now versus the past solution where they felt like they were getting each piece at a minimal discount, a few cents each.
Why is this better? Here's the math. Let's just assume that each piece costs me $.40. And now let's look at the profit calculations.
Original
50 for $50 - cost 50 x $.40 = $20, $3 shipping, profit $27
100 for $90 - cost 100 x $.40 = $40, $8 shipping, profit $42
First solution
90 for $80 - cost 90 x $.40 = $36, $3 shipping, profit $41 (profit is actually less than before)
90 for $85 - cost 90 x $.40 = $36, $3 shipping, profit $46 (but this didn't look like a good deal right?)
Second solution
110 for $100 - cost 110 x $.40 = $44, $8 shipping, profit $48
The key is that for the extra 10 pieces, it was going to cost me $4 more, but I got an extra $6 in revenue. Also, it's too early to tell if the thought of getting 10 free pieces converts better than getting a few cents off per piece.
50 for $50
100 for $90
I have a product that sells for 50 pieces for $50. These 50 pieces weigh just over 1/2 lb.
I have a large size version of that product that sells 100 for $90 pieces. These 100 pieces weigh 1.1 lbs.
So here was the issue, if you ship using the post office, anything under 1 lb ships first class mail for around $3. If it goes over 1 lb, it must go Priority Mail, about $8. So that 1 ounce is costing me $5 in shipping.
So my original solution was to lower the weight to below 1 lb by selling 90 pieces instead of 100. So this is what my offer would have looked like:
50 for $50 ($1 a piece)
90 for $80 (The public instantly knows that this is under $1 a piece)
This solved my $5 extra shipping issue.
However, I ended up going with a different solution. We know that the public expects to pay less per piece as the quantity increases right? I purposely want to give them easy math. I've always been using the price to govern the easy math. But what if I used the quantity instead.
So here's what I did.
50 for $50 ($1 a piece)
110 for $100 (The public instantly knows that this is under $1 a piece)
The public feels like they are getting 10 free pieces now versus the past solution where they felt like they were getting each piece at a minimal discount, a few cents each.
Why is this better? Here's the math. Let's just assume that each piece costs me $.40. And now let's look at the profit calculations.
Original
50 for $50 - cost 50 x $.40 = $20, $3 shipping, profit $27
100 for $90 - cost 100 x $.40 = $40, $8 shipping, profit $42
First solution
90 for $80 - cost 90 x $.40 = $36, $3 shipping, profit $41 (profit is actually less than before)
90 for $85 - cost 90 x $.40 = $36, $3 shipping, profit $46 (but this didn't look like a good deal right?)
Second solution
110 for $100 - cost 110 x $.40 = $44, $8 shipping, profit $48
The key is that for the extra 10 pieces, it was going to cost me $4 more, but I got an extra $6 in revenue. Also, it's too early to tell if the thought of getting 10 free pieces converts better than getting a few cents off per piece.
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