How to Raise Your Product Prices WITHOUT Losing Sales

Hey, what's up fastlaners? Ryan Daniel Moran here in this video I'm going to be sharing with you how you can raise your prices when selling products without isolating your customers even if your competitors are charging less money than you so that you can keep your profit margins high, sell more and still be cool in the process. So I'm going to be sharing with you a few strategies on how to do that which makes getting to the million dollar business point a lot easier. Let's do it. You know, high priced products don't necessarily need to be the best. For example, I once hired a.

Clothing. What do you call it? A fashion, what do you call it? Wardrobe, Personal shopper. I once paid somebody to dress me. This is how they dressed me. Look at this. I was like, I don't want to, I don't want to look like I'm a dad.

Have you ever seen someone who looks more like a dad then than this person? What shoes are these? Right? I mean like I'm only marginally better now of course we're doing this video when I just like now I'm just embarrassed. We're talking about my wardrobe. All of this to say your products don't have to be the best in order to be the highest price because this is like a hundred dollar shirt.

Those are, those are Steve Madden's. So those are probably what hundred dollar shoes? I don't know is that much Steve. So you're.

So lesson number one. Your products don't have to be the best or look the best in order to be considered premium. So I have a personal assistant who came over the other day and brought me a few new shirts. I was like, oh, I love these, they fit me great. I look great in them. I ran them by a few females because I, I'm not allowed to choose what I wear. And they were like, oh, those look great. Love the new style. Old Navy, $9.99. You could have fooled me, right? So it's, this is one of the, one of the big challenges that Amazon sellers and physical product sellers have is that they think that if they're selling the same thing as everybody else, that the only way to compete is on price or reviews. That is not the case. It's not the case at all. The way that you compete, the way that you charge higher prices going to be on how you are positioned in the marketplace. If you keep watching, we're going to go through how to make a few tweaks to the products you're already selling in order to get that profit margin up and sell more. Not just sell for more money, but sell higher quantity. A great example of this is why are competitors at Sheer Strength, which is a company that I started in 2014. I was acquired by a private equity group a few years later. I'm still an owner in the business, but I'm not in the operations anymore. We had a competitor that on one of our products, we were the number two seller in the marketplace. We could not beat this guy, right? Our product was better and we could have sat there on a mountaintop. I could have done this and gone, our product is better, Our product's better. Should be buying our product. Could have done this all day. We have a better product. Here's why. Our product is better. This ingredient is better than right. I could have done this all day. It would not have mattered. It doesn't matter. Saying better doesn't mean anything. Better is not a differentiator. And by the way, price is not a differentiator. So here's where I'm going with this. We couldn't beat this guy. We could not beat the guy who was ahead of us. We were number two. This other dude was number one on one of our products. And I'm a good marketer, so I'm sitting here going, why can't, why can't I beat this guy? Now most people, when they hear this part of the story, they say, what were your prices? We were selling our product for $36. Guess what? We were the second most expensive product in the marketplace. Guess who is number one. The guy ahead of us who is selling twice as much as us. Our product was better, our product was cheaper. His was twice the price of ours. Maybe not quite. I think they sold for $59.99, so almost twice the price. And they sold twice as many units as us. We had over a thousand reviews. Our reviews were just as good as theirs. Why did they beat us? It was all about branding. And I'll give you the quick takeaway here. Number one, branding is all about who you target. So many people, especially like Amazon gurus, will talk about image quality. And that's like image quality, headlines, packaging, that's all important. It's all great. But at the end of the day, what matters is who it is that you're targeting and does your brand communicate that your brand is specifically for them. So for example, this product that we were, that I'm saying in this example, the guy that we could not beat was targeting an older demographic. They were targeting the 40 to 60 year old male category where ours was a little bit more generic. We did a really good job of branding our products as a company but this product in particular wasn't branded to any individual. Theirs was branded to the older male, 40 to 60. That's a more defined person. And that market happened to have higher disposable income and was after a more clinical.

A more clinical approach. So all of their. This was a supplement. So the 40 to 60 crowd isn't trying to get ripped, right? At sheer strength. We, we were after more the people trying to get ripped, stay fit, lose weight. We were after that crowd. Our competitor was after the older person looking for a more clinical approach. So even though our product was better and I could have stood on the chair and said our product was better even for that crowd, that person was looking for a very specific thing. And so our competitor had white medical looking branding. It was a higher price which means better to that crowd. Their messaging was to the 40 to 60 year old demographic and they outsold us two to one. They beat us at one thing and it was communicating to the customer. Better is not a differentiator. Differentiate. Not a different what? Where's the emphasis on that? C Money. Differentiator. Differentiator. Price is not a differentiator. Person is a differentiator. I cannot say that word. So lesson number one, branding and pricing both come down to the person that you're targeting and nothing else. Stick around. I'll go to lesson two next. So a couple other things that you should know about raising prices and one of them is that just by making the decision that you're going to be a higher priced product or higher price brand, you force yourself to target a very specific person. For example.

I don't dislike beer, but I prefer whiskey. So I drink whiskey. This was a gift. Someone gave this to me. I wouldn't have bought this for myself. I don't know if this is a good whiskey or not. I don't know. I buy Glenlivet and I buy Jameson.

I don't know how much this cost, but this is not a low level scotch. Now if you give Glen Fiddich and you give Glenlivet to the same person, chances are they're not going to be able to tell much of a difference.

They're just not. Most people don't have the palate to taste the difference but of Scotch in the same way.

This week I was at a friend's house. They were, they were laughing and bragging about their Trader Joe's $1.99 wine and they said, this is my one 99 bottle of.

Red wine. One 99 cents. It was $1.99 wine.

I know this much about wine. I know enough to be able to impress a group of people when I order and I could tell the difference. They didn't care. It was red wine. The vast majority of people don't care. But there is a perception of value in price. So people will pay a premium for this or a different brand of scotch simply because it's more expensive. And there is like some semblance of a perception of quality here, right? If it's a high price, it must be good. Now, I said earlier that price is not a differentiator. The person is a differentiator. But if you just raise your price, what you do is you isolate a certain part of the market that's price sensitive. What that means is your person is now the person who cares about not buying low level products. So when you have a low priced product and you're trying to target everyone, you have no differentiator. But when you raise your price, you have now cut off a part of the market, which is a really great thing because now you're targeting a specific person and that person.

Does have a desire to choose a product of a certain quality and they will determine that based on price.

So I am of the opinion, like I say publicly, I have retired from the pricing game. I have retired from price wars. I don't want to be in low margin businesses. And if I'm in a competitive market, I want to be the most expensive person in the market. And then we'll create an experience branding a nice box or what have you that matches the price that we want to command. I look at things like an investor. I'm an investor in physical products brands. I advise physical products brands and I have no interest, none in investing in physical products brands that have this much margin unless.

You do one thing differently. And that's what we're going to talk about in lesson number three. Hey. So here's a cool side note before we go to the last tip in this video. This is an average day in one of our offices. We have a couple. We actually have three offices. But.

These shoes, these are my favorite lifting shoes. These are. So I don't do CrossFit. I do more of a power lifter, if you will.

I weigh 165 pounds. I shouldn't call myself a power lifter, but I care more about strength than I do about CrossFit. Right? But I have CrossFit shoes because they were recommended to me by a trainer I was working in the past. And these are just the best shoes for squats. Now here's why I'm telling you this. Even though I'm not the target market, the reason I bought these was for was for two reasons. They were recommended to me by someone of authority, my trainer, which actually would open up a very interesting conversation about influencers. I'm going to add that as a bonus tip in this video because it's relevant here. So since I didn't care, I'm not a crossfitter, I bought on price. I this color of shoe was on sale and I bought this color of shoe because it was on sale. I was not the target market here. I bought on a recommendation. But to the CrossFitter, will they buy a premium for CrossFit specific shoes? 1,000%. So these are like $150 lifting shoes from Reebok. Now why is 150 bucks. Because they've nailed who it's for. They've nailed the person. When you nail the target person, you can charge a premium. Perfect example of what we talked about in lesson number one. All right, so we're going to add a bonus tip talking about influencers. Let's talk about that real quick before we go on to lesson number three.

Working with influencers. People do buy on recommendation from sources that they trust. So I bought these shoes because my trainer should told me that I should buy those specific shoes for what we were going to be working on, like this brand, this specific shoe. Even though I wasn't the target market, I bought because it was a recommendation. Which opens up an interesting conversation about influencers. Influencers are only relevant if they're coming from a position of authority and literal influence. Buying influence. Some people mistake influencers for spokespeople and they are very different. Very different. An influencer's job is to drive consumer behavior to say, I like this product and here's why. Tim Ferriss is an influencer and he's a really powerful one. And if you look at his rates for advertising, they reflect that versus a spokesperson's job is to represent the demographic. So it's why when you watch tv, when you watch the Price Is Right, all of the commercials are old celebrities that the old target market that's watching the Price is right at 11:00am on a Tuesday, all of the spokespeople are an older crowd because that crowd recognizes that person. Do you remember as a kid when you watch the Price is Right and you were like, who are all these Old people that were on tv, they were spokespeople speaking to the target market about colonial pen life insurance and denture cream and whatever else is being advertised. And one of the big mistakes that Internet advertisers are making right now is they're looking for spokespeople rather than real influencers. For example, my buddy Aubrey Marcus runs a company here in town called Onnit. It's a huge performance company. They sell kettlebells and supplements and food. And he likes to tell the story that.

They did a case study between some no known.

Either powerlifter or crossfitter and Ludacris. Last time I was at on it, Ludacris was there hanging out. It was cool, we had a nice conversation. But what Aubrey said was the no named crossfitter. Way out polled Ludacris. Ludacris would be a great spokesperson. But the person who follows Ludacris is not buying him because of his performance enhancing tips. But if you are following somebody who's a crossfitter or a powerlifter, you are absolutely looking for the same results as that person. They're vastly different. And so many physical product owners, Internet advertisers, marketers, and entrepreneurs are not looking at buying behavior based on result. They're looking at reach. That's a spokesperson, not an influencer. Go to the people like my trainer, the people who control the buying behaviors where one recommendation changes someone's decision to buy or not because they're following that person for a result. And that's what you need to be thinking about when advertising your product through other people's audiences. All right, there's your bonus tip. Let's go on to lesson number three. Okay, so I mentioned in the second tip, I mentioned that as an investor, I do not want to be investing in physical products, brands that have no margin or very little margin unless they're doing one thing really well. And the one thing that they need to be, unless they're doing one thing differently than everybody else and that one thing, the one caveat here is if you're lowering your price so that you're getting more customers to sell other products. So if you've got a product that is, that only exists so that you're getting more customers and then selling more product, you have my blessing. But those other products have got to be high margin products. For example.

May I pick up your phone? See money. All right, so this iPhone case.

There'S so much volume in iPhone cases, so much volume in iPhone cases, but I will never touch that Market. Because what else am I going to sell this person? Am I going to sell them adapters? No, you get these from Apple, right?

The iPhone. The iPhone, specifically. If you buy an iPhone, what else are you going to buy? Are you going to buy a case? Are you going to buy adapters? Oh, yeah. So what I'm interested in is I call them gateway products. If you have a product that is a gateway to other purchases. For example, travel with me over here. This right here is an essential oil diffuser. You don't buy an essential oil diffuser unless you're gonna buy, oh, I don't know, maybe essential oils. So this would be a gateway to buying a lot more product. It's not like you just buy an essential oil and fill it with water and never buy anything again. This is only valuable.

If other things are being bought. Essential oils. So in this scenario, you could absolutely compete on price. In fact, I would encourage you to make the best essential oil diffuser God has ever made. On the eighth day, he created the essential oil diffuser. That should be your aim and charge as little as possible. But do not make the essential oil diffuser your business. You're not in the business of selling essential oil diffusers. You're in the business of selling to people who buy essential oils. So this is your gateway into selling a ton of essential oils that are super high priced. So it would be a mistake to, to try and make this beautiful essential oil diffuser and make that the business, because now they're gonna buy this and buy all their other stuff from somebody else. But if you make this the gateway and your real business is all the other stuff that they're going to buy, you will win. Because very, very few people think like this, especially those of you who sell on Amazon.com or Kickstarter, if you sell on any channel. People who sell like on click funnels or through their own website tend to be better at this because they have to get their advertising to roi. But you Amazon people or you Kickstarter people tend to be lazier because you're just seeing where the buyers are and just giving them throwing red meat to the lions. Oh, they're buying that. Let's give them some of that. Which is a very fast way to have to compete on price and a very fast way to have to compete on reviews or images or all the stuff that doesn't matter nearly as much as the person that you are selling to. So if you play this well, you'll beat everyone else because now you can focus on getting the Customer getting as many people as possible and selling way more essential oils than everybody else. But you have to recognize that that's the business because so many people right now are seeing more essential oil diffuser competitors coming to the market and freaking out. They're eating into my margins. That's because you did the first thing wrong. You didn't sell to the person, you sold a product instead. So if you're just selling a boring ass product without any other additional products that have a ton of margin that are targeted to a specific person, you're going to have a really hard time raising your prices. But if you're targeting and messaging specific to the person, like the CrossFit shoe, like the kettlebell, for the person who wants to increase performance, like the scotch, for the very high taste person, you can charge way more money. Way more money actually. So here's another bonus since we're on a roll here. One of my mentor, my oldest standing mentor, his name is Travis Sago, he likes to talk about how the way that you can always be in control of your profit margins is if you are perceived as the only solution to sell something because you have this mini monopoly on something. It's kind of like as of right now, while we're making this video, CBD oil is highly regulated. Now. It's not really regulated, it's just hard to get because a lot of places don't make it readily available. So the price is really high. It's kind of like I had an economics teacher in college who said he, he was from Croatia and he would say he used to talk about how he would smuggle Fender guitars across the Soviet Union borders and people would be captured and killed for smuggling private goods in a communist country. He's like, so you know what I did? I raised my price.

Because now it was harder to get. So I raised my price. If you're perceived as the only solution to something or a rare solution, you're probably price goes higher. That is really hard to do when you're just selling product, when you're just selling essential oils. And it's so funny, you Amazon people don't even like to talk about the markets and the products you're in because you're so afraid that somebody else is going to copy you because you're selling products and not to people. But if you are the essential oils for cat lovers, guess what? You're probably the only solution for that. Now that doesn't mean there's a market for it. But what I'm saying is given that there's a market of cat owners. I lost my cat this week. That's why, that's why the gremlin was got scared, ran outside, hopped the fence, ran to the fence, got hit by a car. This is a sad week in Ryan's life. I'm gonna cry on camera. This is what, this is not a therapy video. All right, so if you're selling essential oils for cat lovers, right, and you've got essential oils that are anti flea, you put the essential oil in and the fleas go away. Or it's calming to your cat or gets rid of hairballs, I don't know. Guess what? You now have a mini monopoly on a very specific person, even if you're selling the same product. If eucalyptus oil is eucalyptus oil, but this eucalyptus oil is on the cat brand and it happens to be specifically for the cat owner who. And this is going to make their cat calm. It's called cat calm eucalyptus oil.

Just by changing the person, the price doubles and all of the cat owners are now going to be talking about it to their other cat owner friends.

So what's our launch plan for that? Launch plan is we're probably going to have a Facebook page or a YouTube channel or an email list that is all cat owners. And now we have a lot easier time promoting that product. Whereas most people go, I got my eucalyptus oil, look at my eucalyptus oil. My eucalyptus oil is so much better. It's so much better than everybody else's.

Doesn't matter. What's important is that it's to the person and it is targeted and the language is specific to that person. If you don't know who your person is, two options. One.

Ask the customers who are already buying your product, why did they buy your product? You will find trends, you will find overlaps.

Start targeting those people because they're already buying. Now just speak directly to them. Number two, choose yourself.

So make the product for yourself. Because you fall into a certain demographic, you fall into a certain race, creed, belief system, age, desire, a result that you want. These are all things that make up a certain demographic about who the buyer is. So if you start with yourself and you make products for yourself, you will probably attract other people like yourself and it will probably look like you be similar age as you.

So what this does is it at least gives you some context to be able to choose who that is. So it frustrates me when physical product owners are competing on price and reviews, and the questions are always about, how do I get more reviews? I have a competitor who entered My market. What do I do? You did the first thing wrong. I have seen products do 100 sales a day just on Amazon with 50 reviews or less and be twice the prices of everybody else. Why? Because the branding is, to a person, it's not about the product.

This is what amateur sellers and entrepreneurs don't think about. If you think about this, you win Scouts honor.

So these are the types of brands I like to invest in, which is why I get so fired up about this, because some brands are perfectly great brands. Sometimes it's not about the product you chose. Sometimes there's nothing wrong with you. Sometimes it's just the person that you're targeting that is the big difference. And if you fix that, you fix your profit margins, you fix your marketing problem. And we're doing this. We have this training about profitable product launches. Profitable product launches are easy. Easy when you know who the person is, because the person.

Is easy to get in front of. But selling more product is really hard. It's really hard to grab eucalyptus oil and say, who wants eucalyptus oil? But it's really easy to say, this is the eucalyptus oil for cat owners. Where are all my cat owners? Where do they hang out? So we're doing this training right now and 80% of the work is them finding out who their person is and getting in front of them. And if they do that, profitable promotions are easy. Profitable launches are easy. They're formulaic, they're simple, they're fast. You rank product faster, your Kickstarter sells out faster, your prices go up. It's easier to convert on funnels. Everything's easier when we do that work up front. But if you don't do that work upfront, you're just always grasping at air.

We'll wrap this up. If you found value in this, let me know in the comments because I know this is a big challenge for a lot of entrepreneurs and a lot of physical product owners specifically because all they think about is the product. When somebody else has more reviews or lower prices, they freak out. And it doesn't have to be that way. If you create a little tiny monopoly on the person that you're serving and give them exactly what product they want, even if it's the same product as everybody else, you will sell for more money and you'll probably sell more units than everybody else because all. There's plenty of cat owners out there. There are plenty of each demographic. And a bonus tip. Oh, man, this is big. I regret saying this. That means you can have multiple brands, multiple companies that sell the same thing. And the only thing that's different is the person that you're targeting. You could have five eucalyptus oils that just are marketed to different people and they're separate companies, and you can sell all those companies, and now you have five sellable brands rather than one.

I just made somebody a million dollars in that video. Boom Sauce. If you like this video, let me know in the comments and subscribe to the channel. Good to see y'. All. Go do this. It freaking works. Bleep out that curse word. See ya, Sa.