Why your digital product is probably priced too low

Why your digital product is probably priced too low

The instinct to price a template pack at $7 is almost always wrong - and the reason has nothing to do with greed.

There is a reflex that hits almost everyone selling their first digital product: price it low. A template pack feels like it should cost $7. A script kit feels like $12, maybe. It took a weekend to make, so charging more feels like overreach.

That reflex costs people real money, and the reasoning behind it is usually wrong in three specific ways.

Mistake 1: pricing the effort instead of the outcome

Nobody buying a contract template is paying for the hours it took to write. They are paying to not have the conversation where they realise their contract has no change-order clause, halfway through a project that has already grown by 40%.

The relevant question is not "how long did this take me?" It is "what does the buyer avoid?" A freelancer who stops losing two unbilled hours a week has recovered a few thousand a year. Against that, the difference between $9 and $29 is not a pricing decision - it is noise.

Mistake 2: assuming low prices sell more

Below roughly $10, price stops working as a filter and starts working as a signal - and the signal is "this is probably thin." Buyers cannot inspect a digital product before purchase, so they read the price as a quality proxy. A $7 "complete system" reads as a lead magnet with a payment form attached.

There is a second, less obvious cost. Cheap products attract the buyers most likely to want a refund, ask the most support questions, and get the least value - because they bought on impulse rather than because they had the problem. Higher prices tend to select for people who actually needed the thing.

Mistake 3: forgetting the platform takes a cut

Most first-time sellers do the arithmetic on the sticker price. The actual arithmetic includes the platform fee, payment processing, and - depending on where your buyer lives - VAT. Sell a $9 product and the money that reaches you is materially less than $9. At $29 the same percentages hurt far less relative to the effort of supporting the sale.

If you sell into the EU, this matters more than people expect. Digital goods are taxed where the buyer is, not where you are. Marketplaces acting as merchant of record - Gumroad among them - handle that for you, which is a genuinely underrated reason to start there rather than self-hosting a checkout. The EU's own One Stop Shop portal explains the regime if you want to see what you are avoiding.

What to do instead

Start from the buyer's saved cost, not your production time. Sanity-check against what comparable paid products charge - not free blog posts, paid products. Then pick the higher of the two numbers you were considering.

Two practical notes. First, you can raise a price later far more easily than you can lower one, so erring high is the cheaper mistake. Second, price and honesty are not in tension: charge properly, then be scrupulous about showing real samples before purchase so nobody buys blind. Both kits on this site show a full sample script on the page for exactly that reason.

If you want to run the buyer-side arithmetic for your own situation, the scope creep cost calculator does the version most freelancers have never actually calculated.

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