Here is one little trick with prices that will increase your sales by up to 30% (and in some instances by up to 300%). Yep, you read it right. I've seen cases where sales increase three-fold after changing prices by only a few pennies.

It works both on-line and off-line. So it doesn't matter if you have an e-commerce store or a brick-and-mortar shop. You can change your prices by just a few pennies and start selling a lot more merchandise.

And the best part is the flood of sales comes instantly -- the moment you change prices. Unlike other efforts to grow your business, such as marketing or positioning, which take time and money to produce results, changing prices will have an immediate effect. So your revenue will increase on the same day you apply the technique I outline below.

But first, let's take a little quiz to see how many you can guess from the list of price points below. Use just your intuition and nothing else. If you had to sell a product at a specific price range, which price would you set? For each pair of prices, pick the one you believe is better, click on the little circle next to it, and see the result. Give it your best shot.

$15.95     vs.     $15.99   
$78.95     vs.     $78.99   
$11.95     vs.     $11.99   
$22.95     vs.     $23.00   
$63.95     vs.     $64.00   

Now look at how many you got right. Most people pick one or two price points correctly.

Look at that list again. It doesn't seem to make sense, does it? Is there is no system that outlines some kind of a pattern?

Yes, there is a system. I'm going to let you in on a huge secret of setting prices. There is one little psychological phenomenon about how our minds work that has tremendous implications on the way people feel about prices. Once you read the following, you'll be able force your customers into thinking that "the price is right" -- no matter what you sell.

In order for you to take advantage of it, you need to know just "how" consumers think about prices. Get comfortable and continue reading. Knowing this will help you make people buy from you like there's no tomorrow, because to them your prices would seem perfect for the value they are getting.

"How" Consumers Think About Prices

Let's look at how a typical customer examines the price of an item.

Here is what happens in their minds within just a split second. That instant when they decide if they like the price or not. Understanding what happens, how it happens and why it happens is going give you the ability to guide their thinking. And that, plain and simple, will let you sell more merchandise to more people.

We read from left to right. And we absorb and process the values of numbers the same way: from left to right, one digit at a time.

How our minds scan prices -- one digit at a time

It's extremely important that you understand what I'm going to explain below. This is the key to knowing how to manipulate the perception of your customers. So read it carefully and visualize each step before jumping ahead. Don't rush. It will all become clear in a minute.

First, I'll show you the thinking process. Then, I'll explain to you why some prices are better than others.

In the example below, $24.99 is the better price. I'll tell you why in a minute. But let's look at what happens in the mind of a customer when she is looking at a price tag of $24.99. And then, another hypothetical customer looking at a price tag of $24.95. Keep in mind what I said about people processing prices one digit at a time.

I picked these two price points just as an example. You can find the better price for any price range, and it's usually just a few cents apart.

With a price tag of $24.99:

With a price tag of $24.95:

This is the difference between making a sale and not making one. But why? Why would a person think differently just because of a difference of four cents? Especially if the "worse" price is actually cheaper?

What's happening?

Well, here is the detailed explanation of what happens and why it happens that way. This is the biggest secret of success in retail pricing.

Let's review each step of what's happening.

As she is about to look at the price sticker, she really begins to wonder "how much it costs". There is this intense sense of curiosity. (Think of yourself when you are shopping. That instant when you are about to see the price of an item. That's the curiosity I'm talking about.) She starts making guesses about what the price is as she looks at the price tag. She doesn't even realize it, but she tries to guess the price while looking at the price sticker.

This is important to understand. I'm not talking about customers' thinking before they look at the price. It's all happening while they are looking at the price tag.

As I mentioned before, since we read from left to right, we also process the values of numbers from left to right.

Two things are happening simultaneously when a customer is looking at a price tag: she keeps guessing what the price is going to be as her brain keeps processing the number that she is seeing on the sticker, digit by digit.

With the example price of $24.99, the first digit she sees is "2".

Immediately, she narrows down the possible price of the item from all reasonable prices to "twenty-something".

Her brain continues processing the number she is seeing and hits the next digit "4".

So now it's "twenty-four-something".

As the possible range of prices for that item narrows down, the customer becomes more willing to make the final guess about what the price is going to be. In order to judge if the price is good or not, she must make a guess about what the price should be before her brain has finished processing what's written on the price tag. She needs that so that she can compare the real price to what she thought it should be. Remember, all that happens in an instant, and the customer doesn't even realize it. We all do it. That's how our brains work.

Here is another important insight:

The bigger part of something we already know, the more willing we are to make conclusions about the rest of that something (or that something as a whole).

That's common sense. But in pricing, this is why knowing how to set the cent value is more important than anything else.

It starts with "$2...". Now she knows it's no longer under twenty or over "twenty-something". With "$24...", it's no longer "twenty-something", but "twenty-four-something". By the time she gets to "twenty-four-something", she starts making specific guesses about what's going to follow as she feels that she has enough information. She already has an idea of what that something is. She just doesn't know it yet.

At this point, she has a specific number in the back of her mind. That number includes cents even before her brain has finished processing what she is seeing.

If by the time she is done processing the price tag, that complete number matches with what she anticipated, then she immediately begins to feel that the price is right and that it's "exactly what she thought it was gonna be". She imagined "$24.99" and the sticker says "$24.99". In reality, she only arrived at the conclusion that the price should be "$24.99" after seeing "$24..." and possibly "9", but she doesn't realize it. She feels that she knew it all along.

The customer always confuses the feeling of being right at guessing the price with the feeling that the item is worth that price (or that it's a "good price"). People are not capable of distinguishing the difference between these two feelings without specifically thinking about it. As a seller, you can use it to your advantage. But in order to trigger that pleasant feeling, the price must match her guess down to the penny.

Before she turned the sticker around, she had no idea what the price was going to be or what the price should be. She was simply curious about how much the item costs. But now, she is positive that she felt the price and it was exactly what she thought it should be.

And then, another psychological phenomenon comes into play. We hate to contradict ourselves. We hate being wrong. So once a person, has convinced himself or herself that he or she guessed the price, then there is nothing in the world that can convince that person that it's a bad price for that item. There is nothing anybody can say or do that would make that person feel that the price is not right for that item. After all, they saw the item and "predicted" its price, and it was exactly what they thought. How can a price like that be too high? It can't, and so they buy.

Now with the second example. The same sequence of events happens until the moment when the customer has finished processing the whole price sticker. What happens if after thinking the price should be "$24.99" the customer sees a price tag of "$24.95"?

She thinks "yeah, almost like what I thought". She doesn't realize why it's "almost like what I thought", not "exactly right". She just feels that way without paying conscious attention to the reasons behind it. She doesn't realize that the price is only 4 cents away from "yeah, that's exactly what I thought". She feels it was close, but it wasn't perfect. It translates into "this price is OK, but not that great".

So the whole opinion about your offer -- which is the price against the value that item would provide -- already has a bad aftertaste for her. It happens even before she finished thinking through the whole "is it worth this, is it not worth this". She already has some sort of a bad feeling because she missed the price. The customer can't pinpoint what it is, but something just wasn't right.

And because she can't tell why she feels that way, the customer comes up with a simple logical explanation: "the price is too high" or "I don't really need this item".

"OK, so it's around $25. Is it really worth $25? Do I really need this widget? Ah, whatever."

That's it. That's how you lose most of the people who would've purchased from you, but didn't.

It's this difference between feeling "yeah, exactly what i thought; that's what this item should cost" and "yeah, more or less as I expected". This is a huge difference. Big enough to make or break a sale.

So How Do I Know Which Prices To Set?

Of course, you can't know which number comes up in the head of every single potential customer for your price range. That's impossible.

But for each price range, there is one price point that has a much higher probability of being that "lucky" price most people would visualize. And this is what you are after. The more people like the price, the more sales you'll make.

How to find that number?

Hold on to your chair, the simplicity of logic in the following statement and the power it gives you as a seller will blow you away.

Which specific price points stick in the back of the customers' minds when they think "nineteen-something" or "twenty-four-something" or "sixty-something"?

The ones they've seen more often in their daily lives!

That's right!

If a person sees a price tag of $24.99 more frequently than $24.95, then that's what she is more likely to imagine when her brain is in the middle of processing a price tag that starts with "$24.".

Did you get it?

It's as simple as that.

Why does a price tag of, say, $19.36 look weird to you? That's because you've never seen it before. Can you recall when was the last time you saw something with that price tag while shopping around?

So a customer would never "guess" the price to be $19.36 while at the stage of "nineteen-something".

On the other hand, $19.95 is one of the most widely displayed price tags in that range. It occurs twice as often as even $19.99.

So if you price your item at $19.95, you will make your price "feel right" for the majority of customers out there.

If you didn't already notice it, here is the bad news: There is no single best value like .99 or .95 or something else that works for all prices. After all, $19.95 is better than $19.99, yet $24.99 is better than $24.95. And we are not even talking about other cent values yet.

Remember when I asked you to take a little quiz and guess the best price? $64.00 turned out to be better than $63.95. Why is that?

It's because when customers see "$6..." for a product that's more likely to be priced "sixty-something" than "six-something" or "six-hundred-something", they zero in on that range. In that range, they are more likely to assume that the next digit is "4" rather than "3" simply because that price tag happens to be put on more products out there. Because of that, a price of $64.00 sells better than $63.95.

Earlier I said that the closer they get to the last digit of the price tag, the more likely they are to jump to the final conclusion about what the price should be. But they start making initial judgments right from the start, from the first digit. So it's really not as simple as setting all your prices to .95 or .99. You need to take the dollar value into account.

Remember, if a customer subconsciously guesses the price, then they get the feeling that the offer is good. So make it easy for them to guess it right!

You are probably thinking: "OK, I get it. But how did you figure out which price to set?"

The Database Of Prices Of "Everything"

To figure out which prices occur more frequently, I compiled a database of retail prices for all kinds of merchandise. This database contains over 15,300,000 price tags.

Let's take $19.95 vs. $19.99, and I'll explain how I know that $19.95 is better.

I grabbed a sample of price tags from my database to see how many times I encounter each of the two. With these price points, I found 3618 items priced at $19.95 and 1531 items priced at $19.99.

Can you explain to me why $19.95 occurs more than twice as frequently as $19.99? Why are there more than twice as many products sold for $19.95 than for $19.99?

All those numbers are from a bunch of unaffiliated companies out there that don't share the same pricing policies, managers or suppliers. They don't even sell the same merchandise or operate in similar markets. Everything about them is different. But still, $19.95 is used much more often than $19.99.

Why is that? Why didn't I encounter something like 3618 vs. 3594 price tags? That would have been "close enough". But no, there are more than twice $19.95 price tags out there.

It doesn't matter why that is. I couldn't care less! What's important is that $19.95 occurs "out there in the world" much more frequently than $19.99. So an average consumer is twice as likely to see a price tag of $19.95 than $19.99 in his or her entire shopping experience.

In the case of $19.95 vs. $19.99, knowing it let's you set the price that's twice as likely to make your customers think "yeah, that's what I expected; great price" as we discussed above.

I also noticed something else. All across the board in the range from $4.00 to $99.99, I saw "spikes of popularity". One price would occur much more frequently than other "commonly used" prices around that amount. Like $19.95 occurring more than twice as often as $19.99 (and hundreds or times more often than, say, $19.36).

I saw something similar with all dollar amounts. There is always a leader. Sometimes, I saw .95 being better than .99, other times it was the other way around. In certain cases, a whole dollar amount is better than .99 or .95. And so on. But more on this later.

Figuring Out The Cent Values Is Awesome And Will Help Me A Great Deal,
But What If I Don't Know Even The Approximate Price Range To Use For My Products?

Ah, I'm glad you asked. That's the easy part.

With all the possible ways to determine how you should price your products, there is one way which is definitely the safest way to go.

The keyword is safe. That's what you should care about if you run a small business. Don't pay attention to slick experts talking about matching the market, analyzing trends and all that other stuff. Leave all that to the giant corporations.

If your cash flow is not established, you'll be in trouble no matter what.

And for a small business, it's all about cash flow. If you don't have millions of dollars of reserves stuffed in your bank accounts, then don't risk experimenting while determining the rough price ranges. Go with the "cost plus" system of setting your prices. Start by basing your prices on what it costs you to deliver the products to your customers and the amount of money you want to be making in the process.

Here is one way to figure out the overall price range for any item you sell.

Take your cost of the item, and multiply it by 2. That starts you off with a 100% markup.

Factor in all other costs associated with making a sale, and see if you are clearing at lest 30% net profit. That includes everything: advertising costs, rent, salary for your employees (and your own, don't sell yourself short), etc. Such costs should be divided by how many units you can realistically sell in a given amount of time. Don't stress too much here, just be realistic.

I should say that a 35% net profit margin is better, but 30% is the lowest you should aim for. You don't want to run a business with too small of a margin. You won't be making any money even though a lot of it will go through your hands. That's what kills more small businesses than anything else -- this illusion that your business is booming while not much is left in the pocket at the end of the day.

If your net profit ends up being higher than 50% of the revenue, then drop the price to make the margin around 40%.

Once you've figured out the rough price range for your item, then open my report and look up that price range.

Let's say that based on splitting up cases/pallets/packs of some item into individual units, you have to pay $13.92 for each until to your supplier. That's your cost. Multiply it by 2. That gives you $27.84.

You estimate that it will cost you, say, $3.72 in overhead expenses to sell each item.

Your cost is $17.64 ($13.92 + $3.72), and your net profit is $10.20. That makes it 36.6% of the revenue ($10.20 / $27.84), so you are fine with roughly this price.

Of course, you are not going to put $27.84 on your price tag, so now you need to figure out your final price that would appeal to the customers. Something that would make them feel that the price is perfect for that item.

Most of the time, you'll have only one good price point that corresponds to the number you got. And that's what you would settle on. But sometimes, you might get two or more good points around your target amount. This example has two good price points to show you the harder case. Obviously with just one point it would be easier, so once you get this, you'll be able to set a price for anything.

Going with the real numbers from my report, the best price points around $27.84 are $24.95 and $29.99 (listed on page xx).

Take each of them and plug them into your equation for profit margin. Do the reverse of what you did in the steps above to arrive at $27.84.

Your own costs won't change when you only change your final price on the sticker, so the formula is pretty simple. (Actually that's not true. With a "good" price you'll sell many more units, so the share of rent and other fixed expenses for each unit sold will drop dramatically. But let's keep it simple for now, especially since such correction is always in your favor.)

Here is the overall set of rules to follow when picking the best of the two price points:

If the higher one happens to bring you over 50% net profit then go with the lower one.

If the lower one happens to bring you under 30% of net profit then go with the higher one.

If it happens that at the same time the lower price brings you less than 30% and the higher one brings you over 50% then go with the higher one.

Here is how it works out with this example:

Your cost is fixed at $17.64 per unit.

$24.95 - $17.64 = $7.31 of net profit. $7.31 / $24.95 * 100% = 29.2% profit margin

$29.99 - $17.64 = $12.35 of net profit. $12.35 / $29.99 * 100% = 41.1% profit margin

You would go with $29.99.

That's a pretty simple formula. And because it's based on your costs and margins, it's the safest way to set prices.

As I said before, you only need to do these calculations when you have more that one good price point candidate in your range. If $24.95 didn't have good price popularity, then you would only see $29.99 in the report and that would be it. That's what you would use right after arriving at the rough amount of $27.84.

In most cases, you'll only have one price point that really "sticks out". So what I've shown you here is the most difficult case. Which is still pretty simple.

Anyhow. By doing things this way, you keep the core of your cash flow safe using the right rough amounts. At the same time, you make your item prices intuitively attractive to the customers by fine-tuning the pennies.

You could use this formula without my report, but then, you would have to guess the final prices to use. Without the report, you could end up with, say, $29.95, which is much worse than $29.99 for the reasons we've discussed earlier on this page.

Why Trying To Guess The Best Price To Use Doesn't Work

Trying to use your gut feeling to pick the best cent value for your prices won't work. It won't work because you are aware of what you are doing.

When deciding on a price, your mind acts very differently from the minds of your customers.

Remember as we discussed earlier. When a person is reading your price tag, his or her brain processes the price one digit at a time while simultaneously trying to guess what the final price is going to be.

When you are trying to decide which price to set by trying to place yourself in your customer's shoes, you are not genuinely guessing what the price might be. You just aren't. And you can't fool or force yourself into thinking that you are.

Your mind does a very different thing.

This happens subconsciously. And trying to imagine yourself as if you were your customer won't work. All price points will seem equally appealing to you. Try it. Imagine yourself as your customer, and try to see what pops in the back of your head if you think of, say, $35. Nothing huh?

You know that the price should probably be $34.xx. But what's better $34.95 or $34.99, or maybe $34.75? Definitely not $34.75? Are you sure $34.75 is not the best price?

Even re-living your own past shopping experiences doesn't help. It's subconsciousness, not consciousness. The more you fixate on some numbers, the more unsure you become of which one to use. I know. I tried it.

Remember how you felt $19.95 to be more natural than $19.99? Yet, you couldn't pick all five price points correctly in the quiz that followed. (Right now, $19.95 and $19.99 might seem the same because your feelings are numbed down. Your logical thinking is turned on. So don't worry about it.) But that shows that it's impossible to predict the best price by thinking about it.

It can only be predicted with statistics. Only by examining the cold hard numbers. Something I did in my report.

Why $50?

The price of my report is $50.

Now, why didn't I set the price to $49.xx or maybe even $54.xx?

Sure, a price tag with a carefully picked cent value would look much more attractive to you. I can name you at least 6 price points around $50 off the top of my head. Each of them has far greater price popularity than $50 itself.

So why didn't I use one of them instead?

I'll tell you why in a minute. But since you are buying this report for your business, you need to look at it from a completely logical perspective. So forget how the price looks or feels. Feelings are for buyers, not for sellers like you and me. In business, there is no such thing as "this is a good price" just because it feels good. It's all about cost vs. benefit. If the return you get by using my report is greater than $50, then it's a good price by definition.

So the only question is: Will my report bring you back $50 through increased sales to make itself worth its price?

Well, if my report only brings you $50 of extra net profit, then it will have been a gigantic waste of time. I wouldn't even bother putting up this website if we were talking only about $50.

But if changing prices can increase your sales by at least $50 per day, each and every day you are in business, then I would say buying my report really helped you. So this is what I'm aiming for.

Truth is, it might bring you extra $50 per day of profit or extra $5,000 per day. As you have probably guessed, it all depends on the size of your business and your current sales volume. The more you currently sell the greater the increase will be in absolute numbers (it will be the same percentage-wise).

But the important part is that the increase in sales will be permanent, and you'll be getting extra profit from day one and for as long as you run your business and set prices this way.

And the increased sales volume will in turn help you grow your business much faster because you'll be able to start spending more on needed business expenses, such as advertising.

Let your imagination run wild for a minute. Think of how much you sell now -- per day, week or month -- whatever is more convenient for you. Multiply that by two. Wouldn't it be great if that instantly became your new sales volume? How much more money would you be making? How much more would you be able to spend on advertising? How many more sales that additional advertising would bring you on top of that? With such snowball effect working for you, how quickly would you be able to expand?

And it all started with a $50 report on how to turn as many of your potential customers into buyers as possible.

What If My Report Doesn't Increase Your Sales?

If my report doesn't help you increase your sales and bring you at least extra $50 of pure net profit per day, then call or email me and I'll give you your money back. I won't ask you for a any kind of proof that it didn't work. Your word will be enough.

I can't guarantee the amount by which your sales will increase (I would be lying if I did without even knowing anything about your business), but I can guarantee that ordering my report and using it to adjust prices will not be a waste of your money. If it doesn't bring more income to you, you don't pay for it.

I give you two months since the day you order the report to adjust prices and see the increase in sales. At any time during these two moths, you can contact me and get a refund for the report.

Why Two Months?

The reason for that is:

The first day, you'll notice an increase in sales, but you will be skeptical. Just like I was. You'll keep thinking that it's probably just a coincidence. And that the sales will drop the next day.

The whole first week will seem weird. You'll constantly keep thinking that tomorrow the sales will drop.

After about a month, you'll start to come down and accept the reality that your sales are going to stay at a much higher level than you expected.

You might relax quicker or it might take you longer, but based on my experience it takes about a month to get used to it.

It will take a month to six weeks for you to truly believe your eyes. But you probably won't be able to change all your prices in one day, right after ordering my report, so I add some time for that too. Two weeks should be enough even for a business with lots of items. That gives us a total of about two months for you to adjust your prices (at least for some items), see the results, and believe that the results are not just a coincidence.

In short, if during the first two months after you order my report, you don't see a substantial and consistent increase in sales day after day and week after week, then contact me and I'll give you your $50 back.

Even though $50 might not be a big deal for a business owner, it's still money. And nobody wants to throw money away. So I want you to know that you always have the option of getting your money back. I believe that giving you two months is fair.

The report is a PDF file (269kb file size) 21 pages long. Covers all prices, but still compact enough for you to print out and carry around while pricing the merchandise. It consists of tables full of analyzed data. And everything is formatted in a way that makes it easy to use in real-world retail environments.

So... why $50?

So why didn't I set the price to some "good" value in hopes of selling more copies of my report, but priced it at $50?

There is no science behind it. And I'm afraid that the reason behind it is not that exciting.

I thought about it long and hard. I could've set the price to some odd value which I know is much more likely to make people buy the report. But the truth is, after having been so frank with you throughout this page, as one seller to another, I'm just not going to stoop so low and try to play pricing mind tricks on you. Not right after explaining to you how it all works. I'm not going to sacrifice my integrity even if it costs me lost sales. We are both sellers, and my price tag of $50 flat is about respect for you more than anything else.

P.S. If you need any help with your order or if you have any questions then don't hesitate to call me at 302-476-2625. Just ask for Sam.

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