In this post I will be publishing my experience by lowering the price of my gig to the minimum, I will tell you everything every day, What do you think of this strategy?, (My last GIG at $ 5)
LOL, Update, yesterday I created my Gig with the lowest price and today in the morning I got the first sale in less than 12 hours, for the moment it works, I’ll tell you what else happens with my last Gig……
Yes, It’s kinda true, but good seller always demand based on their actual service. It’s not good to lower cost of your service, If you have confidence then demand price based on your service and skill you have gathered by hard work.
“Higher sales” don’t mean anything. The only thing that matters is volume.
If I sell one gig for $500 and lower the price to $5 and get 10 sales instead, I didn’t increase sales at all. I sold 10 and made $50, instead of selling 1 and making $500, so I actually took a $450 loss.
So, in short, I think that strategy is terrible. The optimal strategy is to find the sweet spot between price/number of orders that maximizes profit. And that will never be the extreme low end in terms of pricing. So the idea should basically be to start low and keep upping the prices until it no longer increases overall revenue due to the drop in clients.
Most people want to reach the top. You appear to want to reach the bottom.
This is a terrible business strategy. Any successful seller will tell you so.
that is a great explanation. Would you mind to elaborate on how to determine the overall revenue based on sales and clients?
Trial and error.
Imagine you are selling something for $5 and get, on average, 10 clients per month. That means you are making $50 a month on average.
Up your price to $10. If in the next month you get 8 clients, you are making $80. You lost two clients, but that doesn’t matter, you improved your bottom line. Raise prices again.
Keep doing this until you hit a point where you are making less than you were at the previous lower price due to the loss in clients not being compensated by the higher price. That previous price point is the optimum value for your business at that specific time and market. The optimum price is the price at which you will have the least work/clients for the same money. It’s better to do 1 job for $500 than 100 jobs for $5, because the overhead (communication, delivering, revisions) will be 100 times less for the same money.
A corollary to this is that if your price is $5 and you get 100 clients a month, you can up your price to $500 as long as you can get a single client for that price. And if you can get 100 clients in a month, getting one at a much higher price should be possible, unless the price is truly outrageous or you are in a fixed price industry (translation, data entry, image background removal, etc. can’t really set up their own prices, since it doesn’t really matter who’s doing it, anyone will do, so clients will always go for the cheaper option).
If, on the other hand, you are offering a service at $5 and get no clients at all, you have bigger problems than pricing. Maybe go do something else - the market does not want you. It’s not for everyone.
These values will always be changing somewhat, so you need to keep adapting and experimenting. There’s no concrete rule, since there are a lot of factors at play. You may not get any client in a certain month, regardless of the price - the market may be dead for your service (pandemic, for example). But in the long run, this will work. Basically, always be on the lookout for what the market is willing to pay. If you don’t do that, you’re just leaving money on the table, simple as that.
There are a few gigs, mostly menial stuff, for which 99% of people aren’t going to spend more than 5$.
Then there are services for which less money = less guaranteed sales.
I started charging more and I made more, because those who want my kind of services aren’t actually sure on spending that little/want to spend more on it. Different strokes (prices) for different folks (clientele).
Update day 2, I got another client … but even knowing that the gig is for those with a low budget, it demanded too many things from me (I had to do it, but I lost a lot of time), The gif is 5 but he began to demand as if it were 50 or more … At the moment I do not recommend this strategy, I will keep it like that for 1 week and then I will raise prices progressively.
Update until today, 0 sales, 1 proposal to work for long therm but off the platform …
Update, in 1 week only 2 sales with the Gig at $ 5 and one person took 5 days and made 12 revisions …, In the end I did the work many times (I put unlimited revisions), to finish He left 3.3 rating. Bad experience, I will have to raise costs so that these types of people do not arrive.
See? If you had taken the advice given, you would have saved yourself the trouble, and the 3.3 review that can totally nuke a new profile. All for the cheap price of $8.
I came here to warn the OP, only to see excellent advice shared by @visualstudios and a great breakdown as well.
Sad to see this conclusion to the OP’s experiment, but sometimes we can only learn things the hard way.