In fact, I get pricing-related questions from a baffled audience so much that I finally decided to dedicate an entire blog post to this topic. It’s not a straightforward topic, but I’ll do my best to shed some light.
When I first started selling my Canva templates back in 2019, and later my online courses in 2020, I had a lot of questions about pricing as well, so I get where you’re all coming from. But after years of trial and error, I now sell multiple digital products year-round at price points that I’m happy about and so are my customers and clients, it appears.
In this post:
So, without further ado, here’s what I’ve learned about digital products and how to price them:
What is a Digital Product
A digital product is an intangible asset—software, an info product, digital media, etc.—that you make once and sell repeatedly without having to create from scratch each and every time.
What are some examples of digital products?
Some examples of digital products, specifically for solo creators, include:
- PDF files (such as PDF guides, lists, patterns, etc.)
- Audio and video files
- Online courses (that may include texts, audio, video, etc.)
- Templates (such as Canva, Illustrator, or Excel templates)
The Differences in Pricing for Digital vs. Physical Products
Pricing physical products are much simpler than pricing digital products. While this blog post focuses on digital product pricing, I do want to, briefly, touch on pricing for physical products just to clarify the distinction.
Most businesses price physical products using a simple formula called cost-plus pricing.
In short, you tally up all the different costs involving creating the product and bringing it to the market, then you add your desired profit margin to it, and boom, you have your price!
In comparison, digital products are different because of the following:
- You create a digital product only once but sell it over and over. There may be updates involved, but that’s still very different from making every single product in your inventory from scratch.
- People all over the world create and sell digital products in the global market, while physical products tend to be regional. Therefore, pricing can vary significantly on the same platform, based on the business’s location.
- The cost of digital products doesn’t always depend on the cost of the raw materials, and therefore individual creators can take liberty in terms of how they wish to price a product. For a product of the same nature and quality, one may sell it for a few bucks, while others may charge a lot more.
Things to Keep in Mind When Pricing Digital Products
Before I give you my tried and proven step-by-step guide to determine exactly how much your digital products should cost, I have to make a few things clear. Keep the following list in mind not just when pricing your products.
Brand value matters
There is one thing that both digital product sellers, as well as tangible product sellers, would agree on: The profit margin is often determined by brand value. For example, nobody expects Versace clothing to be in the same price range as Forever 21. Similarly, well-known online entrepreneurs like Marie Forleo can charge over a thousand bucks for a single online course, while others with a much smaller reach and brand recognition may charge only a fraction of that for their courses.
This is not a race to the bottom
Many brand-new creators tend to panic and go into a scarcity mindset, which leads them to way under-price their products.
Here’s the thing: if the only way to sell something is by making it way, way cheap, then you may as well not create that product at all.
Create stellar products and price them accordingly; that is the only way to grow and scale as a business owner.
Under promise, and slightly over deliver
Everyone perceives value differently, but still, to make sure that your product makes your customers happy, ask yourself if what you’re providing is worth what you’re asking for. This is hard for a new creator because newness comes with a lack of confidence for most. But still, make it a habit to ask yourself this question every time you create a new digital product.
You won’t make everyone happy, but if you can convince yourself that what you’re giving is worth more than what you’re asking for, then that’s a good place to start.
However, in the spirit of over-delivering, do not fall into the trap of the “race to the bottom” as mentioned above. Balance is key. Do not over-over deliver, just slightly over-deliver. This may sound confusing if you’re a new creator, so ask yourself if what you’re promising is sustainable for you and your current lifestyle. After all, no matter what you’re selling and how much you’re selling it for, at the end of the day you have to make a profit.
The point is to try your best and deliver a product that makes your customers think that they’re getting their money’s worth.
“Cheap” was never attractive
How much your products cost depends on who your customer is. If your audience has a household income of 50k per year, you probably do not want to sell them stuff that costs over a grand. But if your audience is in the top 1% of earners, then a $100 product will fill them with dread and doubt.
The word “cheap” means something different for different demographics. But whoever your audience is, “cheap” isn’t the answer. Figure out who your audience is (more about this later) and then price your product accordingly.
Consider Geographic Location
Here’s the thing: If you’re based in the United States, you cannot charge the same as someone who may be based in India. For example, at the time of writing this, 1 USD = 80+ Indian rupee. Meaning, two creators, one from the US and another from India, who sell similar products and lead similar lifestyles, will have to price their products differently.
When you’re researching prices, pay attention to a creator’s location. Look at creators who’re in the same geo-location as you to get a better idea of what is an appropriate pricing structure for you.
On the topic of location, here’s another point: If you’re in a country where the dollar value is high, let’s say, Bali, but if you’re competing with US creators, you can actually price your products similar to what US creators are charging and get more bang for the buck. Although, there’s a serious ethical gray area there, so be careful and do your research if you’re considering that kind of digital nomadic lifestyle.
But if you’re in the US, you do NOT want to join the race to the bottom because that’s simply not a sustainable business model.
The first price is not the last price
In other words, for most digital products, you can always change or increase the price. Customers understand that. Nobody’s going to look down on you for increasing prices. After all, you’re not selling essential goods.
So yes, as you grow as a business owner, you’ll start building a community and your authority will increase with time, and so will your product prices. If you’re worried that your product may be cheap now, know that you can always adjust down the road.
With all this in mind, let’s now look at how to come up with a price for your digital product, assuming you’re a new(ish) online business owner.
Also, note that pricing different digital products require different strategies. In this blog post, I’ll specifically show you how to price digital templates/printables and online courses. These are some of the most common digital products we—individual creators, bloggers, and solo online business owners—create and sell the most.
How to Price Digital Templates and Printables
The following steps are ones I personally used when I started my Canva template shop. You can use the same steps for selling your own Canva templates, but also for selling any digital product templates (such as Photoshop, Illustrator, InDesign, Keynote, etc.) as well as printables.
Most people sell digital templates and/or printables on platforms such as Creative Market, Etsy, etc. Many of these creators also sell their products on their own websites, as I do; I sell the same Canva templates across all these platforms.
To stay consistent and fair to my potential buyers, I price my products the same regardless of the platform I’m selling on. So, for example, the same template that is $25 on my website’s Canva shop is also $25 on my Etsy shop.
But how did I come up with the number 25 for my product’s price? That’s where the following steps come in:
Step 1: Decide where you’ll sell your products
As I’ve mentioned, I sell on multiple platforms. others, however, may sell only on one platform. Regardless, the first step is to decide where you want to sell because your pricing will depend on that.
For example, because I sell my Canva templates on multiple platforms (Etsy, Creative Market, this website,) and because they all have the same price regardless of the platform, I did my pricing research based on Creative Market and Etsy.
But some sellers may sell only on their website, and if that’s the case, they can enjoy more freedom in pricing (Jenna Kutcher, for example, sells her digital product templates at a much higher rate than the typical going rate because she only sells on her website. This is the so-called brand value I have mentioned before.)
Step 2: Find a pattern in pricing
After you’ve chosen your platform, see how similar products (to what you plan on selling) are priced.
This is going to be confusing at first because you’ll find a rather large range. For example, I have seen people selling 20+ Instagram templates for the same price as someone else selling 100+ Instagram templates. Makes no sense, does it?
But that’s OK. In this step, I want you to find shops you like, shops that are selling similar products to your own with similar aesthetics. Then see how they’re pricing their products.
Feel free to set up a spreadsheet for this.
Make note of the cheapest price and the most expensive.
Some tips on picking the shops for your research:
- Choose shops that are based in your region
- Choose shops you really like: ideally, they sell similar products to your own
- Pick shops that have a lot of sales
- Make sure these shops have a high rating/review
Step 3: Create a baseline
Once you have a good idea of what the typical going rates are, from the cheapest to the priciest, pick a middle point.
So, if the cheapest is $5 and the most expensive is $50, I want you to pick a 22.5. That is the cheapest you will sell your own product for (Assuming you have quality products.)
Step 4: Lean into your confidence and scale
Now, of course, the goal is to charge higher than the cheapest baseline we established in the previous step, but that’s something that comes with experience and confidence. If you feel confident enough that your products are worth more, feel free to price them higher than that middle point. How much higher? That depends on how confident you are.
Some notes on sellers who only sell on their websites:
Sellers like Jenna Kutcher can price their products higher because:
- They are big in their industry, with tens of thousands of visitors per month.
- Their brand value affords them to price their products much higher than someone who’s just starting out or those who have a smaller reach.
- Because they’re not selling on any third-party platforms, they don’t have to pay attention to some “typical” price points on those platforms.
But don’t worry if you’re not Jenna Kutcher level yet; what you lose from not asking for premium prices on your website alone, you can make up for by selling on multiple platforms 🙂
And now, let’s talk about pricing your online courses.
How to Price Online Courses
Online courses are a lot of work, so I highly recommend you do not price anything less than $99 if you’re a US-based creator. Anything less and it won’t be sustainable. If you don’t think your product is worth that much, then consider adding more value, or stripping content to create a smaller product like an MVP (Minimum Viable Product.)
Assuming you’re selling an online course, follow these steps below to come up with a price that is at least $99 or more.
Step 1: Assess audience demographics
All online creators should know their audience. When you create content, you create an audience persona and fashion your content based around that persona. If you’ve been following this rule, then you should already know what kind of audience you have, who comes to your website, who signs up for your email list, etc.
For example, consider two hypothetical creators: Let’s call them Alex and Dominique. Alex has a blog where they write about home decor and her focus is tiny spaces, dorms, studios, small apartments, etc. On the other hand, Dominique focuses on interior decoration and DIY for beach houses, mansions in Malibu or Florence, or… oh well, you get the picture.
My point is, for the same effort and types of content, Dominique can charge hundreds if not thousands for their course, while Alex should aim to price their course for middle-class or low-income individuals or families.
So, before you do anything else, figure out who your audience is because you’ll have to price your course accordingly.
Believe it or not, this is by far the most important factor when it comes to pricing your online course.
I’ll give you one other example, just to drive this point home. Let’s assume that you have a course where you teach people how to listen to others. The methods may be exactly the same, but if your audience comprises CEOs then you can charge them thousands for your course, while a lot less if your audience happens to be salaried managers who’re signing up for the course for personal development, and not through their companies.
Step 2: Asses the value
Consider the following scenarios:
In the first scenario, you’re teaching people how to furnish homes.
And in the second scenario, you’re teaching people how to write pitch decks for startup funding.
The first course makes people’s homes pretty, but the second course makes people money.
Naturally, the second course will be priced higher than the first, assuming similar target demographics.
Step 3: Look at how much others are charging for similar content
Do your research, look at creators who may have a similar audience as yours, and then see how much they charge their audience.
For example, I will never price my courses after Marie Forleo’s courses. She’s on a whole different level.
When I was struggling to price my course, I looked at bloggers with whom I related to. Folks like Michelle of Making Sense of Cents, for example, is a creator who, I felt, was serving a similar audience to mine—financially comfortable, but not necessarily uber-rich.
Basically, find creators who you think have a similar audience to yours and see how they’re pricing their courses.
Step 4: Set the first price (then increase it)
Remember I mentioned before, your first price is not the last.
I remember eyeing Marie Forleo’s copywriting course Copy Cure way back in 2017. It was less than $500. Two years ago, in 2020, I finally signed up for her course, and it was well over $1,000.
Don’t think that your first price is going to be the last. You’re allowed to test the waters. Go with a price that you feel comfortable with, and this has a lot to do with your own confidence level. As your confidence grows in your own product, through experience as well as feedback from customers, you’ll feel more comfortable upping your prices.
I have mentioned not pricing courses less than $99. That’s your base price regardless of your demographic. Based on how confident you are and who you’re selling to, and the kind of value the course brings to your audience, feel free to up the price. How much? Well that, unfortunately, I cannot say.
Lean into your confidence level, and pick a price. You can always (and most likely will) change it and make it more expensive.
To that effect, I just want to point out that it’s a lot easier (and better) to increase the price of an online course than decrease it. So, it’s better to start cheaper and then up the price, than the opposite.
For example, When I launched my course—Side Income with Canva Templates—it was $149. Less than a year later, emboldened with positive feedback from students, I was comfortable enough to up the price.
Step 5: Give pricing options
A trend among almost all creators is to give pricing options for online courses. Aside from making payment easier on some folks, options have psychological effects on the customers as well.
For example, when you see only one price, your mind typically goes to whether you want to buy the course or not.
But if you give two options, some people’s thinking will shift from “should I buy?” to “which option should I pick?”
Essentially, adding more pricing options will increase your chances of selling more.
Do make sure that when you add a payment plan, the total is more than the one price option. Payment platforms charge for transactions, so if you have multiple payment options, then ultimately you’ll be charged more for transactions too. So take that into account when your setting payment plan pricing.
And that’s all I have on pricing.
Pricing is never straightforward. Much of it has to do with how confident you are in your products and the purchasing power of your audience. Consider these steps I’ve laid out above more as tips rather than a concrete tutorial. Trust your guts, and go from there. In the meantime, if you have questions, feel free to share them in the comments.
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