---
title: "Want to Sell Products? Do You Know These Pricing Mistakes?!"
description: "Price is not everything, but it can represent everything! Reasonable pricing can help you achieve higher profit markets! This article discusses common product pricing mistakes, consumer psychology regarding prices, and practical pricing techniques, as well as how to plan prices for your entire store."
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published: "2014-11-07"
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# Want to Sell Products? Do You Know These Pricing Mistakes?!

> Price is not everything, but it can represent everything! Reasonable pricing can help you achieve higher profit markets! This article discusses common product pricing mistakes, consumer psychology regarding prices, and practical pricing techniques, as well as how to plan prices for your entire store.

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Price Market
Price is not everything, but it can represent everything! Reasonable pricing can help you achieve higher profit markets!

**I. Product Pricing Mistakes**
1. Pricing products solely based on cost
Many Taobao sellers do not have a correct understanding of product pricing. They think that as long as they cover the cost and make a certain profit, the price is set, without considering market and consumer factors.
2. Believing that the cheaper the product, the better it sells
Here is a small story to share: An American businessman imported a batch of finely crafted, high-quality top hats from abroad. To ensure good sales, he priced them the same as other ordinary hats, but sales were no better. This puzzled him because the hats were truly exquisite and beautiful. One day, the businessman fell ill and asked his neighbor, who also ran a small business, to sell the hats on his behalf. The neighbor misread the price of $12 written by the businessman as $120, and the hats were sold out immediately.
From this story, we can see that product pricing is not about being as cheap as possible. In fact, when our product price is much lower than the market price, consumers may think, “Can it be good if it’s so cheap?” or “Is it fake because it’s so cheap?” This shows that if our product price is set improperly, we not only fail to earn the deserved profit, but customers are not appreciative either. Because customers do not want to buy cheap; they want to buy “good value” and “worth it”!

**II. Consumer Purchase Psychology and Perception of Price**
1. The degree of importance consumers place on price versus the product itself
Customers sometimes buy products they do not “need” at the moment because of promotional prices, but they are also buying products they believe are valuable and worth it. Their emphasis on price does not exceed their emphasis on the product itself. Customers determine which price range to buy based on their economic strength; they are simply looking for the product with the highest “cost-performance ratio” within a certain price range.
2. Consumers never know the price, but they know how to compare prices
In other words, they do not know how much a product is worth, but they know how to determine if it is cheap or expensive through comparison.
3. Consumer understanding of low prices
High-priced products are not necessarily good, but “cheap goods are not good,” and “you get what you pay for.” For many customers, low price means low quality, and they will never buy low-quality products, of course, referring to “low quality” within a certain price range. If you adopt a low-price strategy early on, the price should not be too low; it only needs to be slightly lower than similar products (similar products, similar seller strength). New stores have few transactions and no sales or reviews for buyers to reference. Too low a price may make buyers doubt product quality when selecting, which is not conducive to closing the sale.
4. Most consumers avoid buying the most expensive or cheapest products and choose a relatively safe middle path
For example, for the same product online, one store sells it for 300, another for 100, and another for 30. Consumers will think: the 300 one is definitely overpriced and worry about overpaying; the 30 one is cheap and of poor quality, so it is sold cheaply. The 100 one is relatively normal and more likely to be chosen by consumers.

**III. Product Pricing Techniques**
1. Mixed Value-Added Method
The purpose of this pricing is to make customers lose the ability to compare. For example, if you have a single product with many similar competitors online at similar prices, your advantage cannot be highlighted. At this time, you can add some free gifts, or bundle it with another product as a package, or add many combinations, effectively confusing buyers’ price comparison ability and making them unsure of the product’s value.
Of course, you can also think in the opposite direction: if most online sellers sell the entire set, you can price individual items and then combine them with other set items in the details to form a package.
2. Average Value Method
On Taobao, search for the main keyword of your product category, then sort by relevance, take the average value of the top 200-500 products, and use that as your product price. However, consider your own product’s profit margin and other factors.
3. Numeric Pricing Method
Numbers carry different meanings. For example, using “8” in pricing can satisfy customers’ psychological desire for “prosperity.” Numbers with curved lines, such as 6, 8, 9, 0, and 3, are more easily accepted by customers, while numbers without curved lines, like 1, 4, and 7, are less popular.
4. Smallest Unit Quotation Method
Pricing using the smallest unit can give customers a psychological feeling of getting a bargain. This pricing method is relatively suitable for more expensive single items, such as high-grade West Lake Longjing tea. For online consumers, the price per jin (500g) is indeed a bit expensive, so consider selling it by the liang (50g). Another example is the cosmetics industry, where you can introduce travel-sized trial packs to make the price appear lower.
5. Value-Based Pricing Method
This method is rarely used by sellers; it is generally used for luxury goods. Literally, it means pricing based on the value the product can bring to the user. For example, Afu Essential Oil could consider doing a “First Bottle of Essential Oil in 2013” as a gimmick to drive up the price of essential oils. For small sellers like us, this is basically not applicable.

**IV. Store-wide Product Price Planning**
1. Low Price (Traffic-driving Products)
Prices lower than competitors, mainly to attract buyers to visit the store and place orders. These products should account for about 20% of the total store products. Not too many, as too many would make buyers think the store is a street stall selling cheap goods.
2. Medium Price (Profit Products)
This is the core source of store profit. The price is neither high nor low, and it is a “middle-of-the-road” price that consumers prefer, both within the store and among similar products in the industry. These products should account for about 70% of the total store products.
3. High Price (Positioning Products)
Here, high price does not mean absolute high price, but relatively high within the store. It aims to tell buyers: “Our store’s products are of quality!” These products should account for about 10% of the total store products.

**Summary**
Product pricing has the characteristic of two-way decision-making between buyers and sellers, so when pricing, we must consider consumers and market demand. This article hopes to help you set the most appropriate price when pricing your products, allowing you to achieve higher profits and market recognition.

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