The best way to price a digital product is value-based pricing—charging based on the outcome it delivers, not just effort or competitor prices. If my product helps someone make an extra $1,000 a month, I can charge $100, $500 or even $1,000+ depending on how much value it provides.
Most people price too low and make their product look cheap or price too high without proving the value and scare buyers away.
I’ve done both before but once I figured out how to price based on value everything changed. Now I’ll break it down for you so you don’t have to guess.
1. Why Pricing Digital Products is Different
Digital products don’t have inventory costs like physical goods. Once I create an ebook, online course or template I can sell it an unlimited number of times without extra costs.
That means pricing isn’t about expenses—it’s about how much someone is willing to pay for the transformation my product provides.
Here’s what actually determines the right price:
- How valuable the outcome is to the buyer – Does my product make someone money, save them time or solve a major problem?
- Who I’m selling to – Beginners won’t pay as much as professionals or businesses.
- What competitors are charging – But instead of matching their prices I focus on making my product look more valuable.
The Biggest Pricing Mistake I See
Early on I made the mistake of pricing based on effort. If I spent months creating something I assumed I could charge more. But buyers don’t care how much time I put in—they care about results.
That’s why a 10-page guide that helps someone land a $10,000 client is worth way more than a 500-page book filled with general advice. Once I started pricing based on results I made way more money.
2. The Best Pricing Models for Digital Products
I’ve tried many pricing strategies but these are the ones that work.
1. Value-Based Pricing (Best for High Profits)
Value-based pricing means I set my price based on the problem my product solves not just on what others are charging.
For example if I sell a course that teaches freelancers how to land high-paying clients and that skill helps them make an extra $2,000 per month I can charge $500–$1,000 for it. The more valuable the transformation the higher I can price my product.
How I Set Value-Based Prices:
- I identify the main problem my product solves.
- I ask myself “How much would someone pay to fix this problem?”
- I make sure my product is priced based on the result it delivers not just on competitor pricing.
2. Tiered Pricing (Best for Maximizing Revenue Per Customer)
With tiered pricing I offer multiple price points so buyers can choose the one that fits their budget. This works because most people will choose the middle option and I make more money overall.
Example of Tiered Pricing:
- $49 – Ebook only
- $199 – Ebook + Video Course
- $499 – Ebook + Video Course + 1:1 Coaching
I use this strategy because I can make more money without creating an entirely new product. Instead of offering discounts I add more value to the higher priced tiers.
3. Competitive Pricing (Works for Some Markets but Risky)
Competitive pricing means I set my price based on what others in my niche are charging. This can work in markets where customers compare similar products but it’s also risky because it can lead to a race to the bottom.
Instead of competing on price I compete on value. I charge slightly more than my competitors and make sure my product looks superior by offering more bonuses, better content or extra features that justify the higher price.
4. Freemium Pricing (Best for Software & Memberships)
Freemium pricing means I offer a free version of my product and charge for premium features. This works well for SaaS (Software as a Service), memberships and digital tools where I want to attract a large audience and upsell later.
For example tools like Canva and Dropbox use freemium pricing to get people in the door then convert them to paying customers by offering exclusive features. This model only works if I have a way to consistently upsell premium features.
3. Psychological Pricing Hacks That Work
People don’t buy based on logic—they buy based on emotions. Here are the pricing tricks that work for me.
Charm Pricing – Prices ending in 7 or 9 feel cheaper. That’s why $97 converts better than $100.
Price Anchoring – I show a high price first to make the real price feel like a bargain. If I want to sell something for $499 I first mention that similar programs cost $1,000+. That makes my price seem like a steal.
The Decoy Effect – If I offer three price points most people will choose the middle option. I make sure my middle tier has the best value so that’s what people buy most often.
Price = Quality – If I price too low people assume my product isn’t good. I’ve found that raising my prices actually increases sales because it makes my product look more premium.
4. How I Test & Optimize Pricing
No price is perfect the first time. I test different price points to find what works best.
1. A/B Testing Different Prices
If I’m unsure whether to price a product at $99 or $149 I test both. If the $99 price converts at 3% but the $149 price converts at 2% the higher price is actually better because I make more money overall.
2. Using Discounts Without Devaluing My Product
I don’t run constant discounts because it trains people to wait for sales. Instead I use limited time early bird pricing or offer bonuses instead of cutting my price.
3. Raising Prices Over Time
Most people undercharge. If my product is selling well I raise my price in small increments and see what happens to conversions. Every time I’ve done this I’ve made more money without losing too many sales.
5. Real-World Pricing Case Studies
Pricing Affects Perceived Value
- A Stanford study found people rated the same wine higher when told it was $90 vs. $10.
- Teachable found pricing an online course at $497 instead of $97 increased revenue 4X, even with fewer buyers.
Freemium Pricing Works for Recurring Revenue
- Spotify converts 46% of free users into paid subscribers by using a free-to-paid upgrade model.
- Dropbox grew from 100,000 to 4 million users in 15 months with a freemium strategy.
Premium Pricing = Higher Profits
- Apple sells fewer iPhones than Samsung but makes more profit because they charge premium prices and never discount.
6. How to Choose the Right Price for Your Digital Product
If I’m unsure about pricing I follow this formula:
- Find a similar product in my market.
- How mine is better or different.
- Price slightly higher and justify with bonuses, exclusivity or better results.
Before I set a final price I make sure:
- My price reflects the value of the transformation.
- I’m using psychological pricing tactics.
- I’ve tested different price points.
Conclusion: The Only Pricing Rule That Matters
There’s no “perfect” price—but there’s a wrong one.
If my price feels a little uncomfortable it’s probably right. Most people undercharge. If buyers say yes instantly I’m too cheap. If some hesitate but serious buyers still buy I’m in the sweet spot.
Stop pricing based on effort. Price based on value. Then, charge what you’re worth.
