Pricing is hard

As we record the Johnny.Decimal Workshop, I'm thinking about how to price it. I wanted to record my thoughts somewhere that I could link to them later.Pricing things is hard.

I'm not a salesman. It's the part of my new job that I enjoy the least.

When we released the Workbook I had no idea what it was worth. How could I? What baseline could I possibly have? It's a PDF that we'd written.

It's simultaneously worth nothing (it's a digital good with zero marginal cost) and everything (it's how we pay our rent).

So it's an equation. Basic maths. Price × sales. Higher price, fewer sales, and vice versa. Where's the sweet spot?

Doing it wrong

I treasure my audience. Lucy and I call you 'the Johnny.Decimal family'. We really do.

So when I price a thing high, my best supporters buy it immediately, and then if I lower the price ... that feels bad.

This happened, obviously. There's nothing I can do about it now, other than learn the lesson.

#1: Turn it up, not down.

Unfortunately, discounts work

I hate the bullshit where someone says that some thing is 'worth' some amount and if you get this one thing and this other thing then really the 'value' is $499 but unbelievably you get it for $4.99!

I refuse to play that particular game, but people do love a deal. It's just human nature.

#2: Price it higher, but always have a deal.

This feels a bit sleazy, but I need to get over it. Make the base price higher, but nobody actually pays it: there's always an offer.

And it aligns with #1: you can easily turn it up by adjusting the coupon discount.

Lower price × higher volume = lower stress

When the Workbook was $37, some days I'd wake up to zero sales. (~80% of my sales occur while I'm asleep here in Australia.)

That's terrifying.

So when I dropped it to $19, the overall earnings didn't necessarily go up, but the chance of any given day being disastrous certainly went down.

#3: I prefer volume over price.

This sits nicely with me. I'd prefer to be more affordable, and this means I get to help more people.

(The alternative is to go high-end. The price of entry for some of my competitors starts at multiple-hundreds of dollars. Good on them, but that's not for me.)

Sales are spiky

What are you people doing out there?

If my best day last week was 100%, my worst was 19%. The sales graph is super spiky and as far as I can tell there's no pattern.

 │▓
 │▓
S│▓         ▓
a│▓         ▓
l│▓   ▓     ▓
e│▓   ▓     ▓
s│▓ ▓ ▓ ▓   ▓
 │▓ ▓ ▓ ▓ ▓ ▓
 │▓ ▓ ▓ ▓ ▓ ▓
 └────────────
  ThFrSaSuMoTu

(Indulge me my passion for pointless ASCII graphs.)

So you'll have a great week -- the first week of January was a record-breaker -- and you'll think, mad!, we've cracked it.

And then the next week will be crap.

It's been long enough now that I've learned to ignore it.

#4: View sales month-by-month not day-by-day.

#5: Don't respond to yesterday. It was random.

An experiment

This header was going to read 'this isn't science' and then I realised, no -- it's the very definition of science: I don't know the answer, and I'm testing hypotheses with experiments.

And so if you see prices change, or you wonder why he did that, the answer is ... experiment. It's just some guy with no expertise trying to figure it out.

It's not nefarious, and it's certainly not personal.

Discuss this on the forum.