Price points

Ask Me Anything Q&A Trueprofitaprilama

Topic summary

Pricing Markup Strategy:
A recommended markup is 2.5x product cost, yielding approximately 60% gross profit margin. This provides sufficient buffer to cover advertising, taxes, platform fees, and maintain healthy net profit.

Psychological Pricing:
Using .99 price points (e.g., $9.99 vs $10.00) remains effective, as it creates a perception of lower cost despite minimal actual difference. Major brands continue using this tactic successfully.

Premium Brand Discounting:
Discounts are compatible with premium positioning when executed strategically:

Avoid:

  • Constant or storewide sales
  • Aggressive promotional language (“CRAZY 90% OFF”)
  • Heavy sale-focused visuals and banners

Recommended approach:

  • Limited-time offers on select products
  • Tie promotions to specific dates (brand anniversaries, etc.)
  • Use subtle, brand-aligned messaging
  • Frame discounts as exclusive rewards rather than desperate pushes

This maintains urgency without compromising brand perception.

Summarized with AI on October 29. AI used: claude-sonnet-4-5-20250929.
1

Hello,

I have a few questions to ask and hopefully you can help me with them all.

How much should we be marking our products up by i.e x3 x4 x5. Is there a certain number we should aim for?

Also is it still better to price at .99 price point as opposed to a whole number?

Final question, could you give me some insights and your thoughts on discounts for a premium brand.

2

Thanks @MIIKOA — happy to dive into your questions!

Is there a certain price markup rate we should aim for?

Yes! A solid benchmark is:

Price = Product Cost × 2.5

Why 2.5?

Because 2.5x gives you around 60% gross profit margin. Formula: Profit Margin = (1 - 1/Markup) × 100%

That’s a healthy margin to cover ads, taxes, platform fees — and still leave you with decent net profit.

Is it better to price at $9.99 instead of $10.00?

Absolutely. $9.99 feels cheaper, even if it’s only 1 cent lower. It’s a classic tactic used by big and small brands alike — no reason not to use it.

Thoughts on using discounts for a premium brand?

Just because you’re premium doesn’t mean you can’t run discounts — you just need to do it tastefully. Here’s a simple checklist:

What to avoid:

  • Constant or storewide discounts: Hurts your brand perception
  • Loud, aggressive promos: Stuff like “CRAZY 90% OFF” feels cheap
  • Sale-heavy visuals: Avoid big red banners screaming “SALE!”

What to do instead:

  • Run limited-time offers on select products — ideally tied to a fixed date (like your “brand day”)
  • Use clever, brand-aligned copy — something witty, subtle, or emotional that feels true to your brand
  • Think of the offer as a reward, not a push

That way, you create urgency without damaging your premium image. Let me know if you want more examples or help tweaking your offers!