Pric­ing a prod­uct is one of the most impor­tant deci­sions for any eCom­merce busi­ness owner. 

A well-thought-out pric­ing mod­el not only affects your prof­its but also shapes how cus­tomers see your prod­uct, helps you stay com­pet­i­tive, and sup­ports long-term growth.

Whether you are sell­ing phys­i­cal goods, dig­i­tal down­loads, or sub­scrip­tion-based ser­vices, choos­ing the right price can be challenging.

At WPBe­gin­ner, we have over a decade of expe­ri­ence suc­cess­ful­ly sell­ing top-rat­ed plu­g­ins like WPForms, Mon­sterIn­sights, and Opt­in­Mon­ster. This exten­sive expe­ri­ence has giv­en us deep insights into prod­uct pric­ing, includ­ing which pric­ing mod­els work best for dif­fer­ent types of tools and how to use them to grow a business. 

In this arti­cle, we will walk you through proven pric­ing strate­gies, explain how to price a prod­uct effec­tive­ly, and share insights to make sure your prod­ucts attract cus­tomers with­out hurt­ing your prof­it margins.

We will cov­er a few dif­fer­ent top­ics in this guide, and you can use the quick links below to jump to the one you want to read about:

What Is an eCommerce Pricing Model?

An eCom­merce pric­ing mod­el is a strat­e­gy that busi­ness own­ers use to decide how much to charge for their prod­ucts or ser­vices in an online store.

It acts as a guide­line for set­ting prices by con­sid­er­ing key fac­tors like pro­duc­tion costs, mar­ket demand, com­pe­ti­tion, and the per­ceived val­ue of your product.

Choos­ing the right eCom­merce price mod­el can help you scale your busi­ness, boost prof­its, attract new cus­tomers, and stay com­pet­i­tive in the market.

Unlike rely­ing on guess­work or per­son­al intu­ition, a struc­tured pric­ing mod­el makes sure that your prices are fair when con­sid­er­ing your costs and mar­ket con­di­tions. It pro­vides valu­able insights into cus­tomer behav­ior and will­ing­ness to pay, which can improve sales and cus­tomer satisfaction.

Addi­tion­al­ly, using a pric­ing mod­el pro­motes con­sis­ten­cy, mak­ing it eas­i­er to adjust your prices as your busi­ness grows or the mar­ket evolves. 

Over­all, a strate­gic eCom­merce pric­ing mod­el reduces the risks of over­pric­ing or under­pric­ing, help­ing you boost rev­enue and build a sus­tain­able, long-term business.

Types of eCommerce Price Models

Here is a list of some com­mon eCom­merce pric­ing mod­els that are used by suc­cess­ful brands and busi­ness­es online.

Cost-Plus Pric­ing Model

The cost-plus pric­ing mod­el is one of the sim­plest and most pop­u­lar pric­ing strate­gies used by eCom­merce businesses. 

In this mod­el, the price of a prod­uct is set by cal­cu­lat­ing the total cost of pro­duc­ing it and adding a fixed markup to ensure a profit. 

The total cost includes direct expens­es like man­u­fac­tur­ing, ship­ping, and raw mate­ri­als, along with indi­rect costs such as over­head. The markup is usu­al­ly a per­cent­age of the total cost, mak­ing sure the busi­ness makes a prof­it on each sale.

For instance, if you are sell­ing clothes and it costs you about $25 to man­u­fac­ture a T‑shirt, you can set its price at $30, and you will make a prof­it of $5.

One of the main advan­tages of the cost-plus pric­ing mod­el is its sim­plic­i­ty. Since it’s based on actu­al costs, it’s easy to cal­cu­late and imple­ment, mak­ing it a pop­u­lar choice for begin­ners who are just open­ing an online store.

Val­ue-Based Pric­ing Model

In the val­ue-based pric­ing mod­el, the price of a prod­uct is deter­mined based on its per­ceived val­ue to the cus­tomer rather than the cost of production. 

Here, busi­ness­es focus on what cus­tomers are will­ing to pay for the ben­e­fits their prod­uct provides.

A pop­u­lar exam­ple of the val­ue-based pric­ing mod­el is Apple prod­ucts, such as the iPhone, iPad, and Mac­Book. They are priced based on the per­ceived val­ue they offer to cus­tomers rather than just the cost of production.

How­ev­er, busi­ness­es must invest time in learn­ing what their tar­get audi­ence val­ues most and how they view the product’s worth. Addi­tion­al­ly, strong cus­tomer loy­al­ty is essen­tial for this mod­el to work effectively.

Com­peti­tor-Based Pric­ing Model

In this eCom­merce pric­ing strat­e­gy, busi­ness­es set their prices based on what their com­peti­tors are charg­ing for sim­i­lar products.

After research, busi­ness­es can choose to match, slight­ly under­cut, or price high­er than com­peti­tors depend­ing on their posi­tion in the mar­ket and the val­ue they offer.

For exam­ple, if you research the most pop­u­lar con­tact form plu­g­ins on the mar­ket, you’ll notice that most pric­ing plans start at $30–$60. This is an exam­ple of com­peti­tor-based pric­ing, as all of them are offer­ing sim­i­lar prod­ucts at sim­i­lar prices.

How­ev­er, this mod­el also has some down­sides. It doesn’t con­sid­er the unique val­ue your prod­uct might offer, and it can lead to con­stant­ly low­er­ing prices to beat competitors.

This reduces prof­it mar­gins and makes it hard­er to stand out.

Dynam­ic Pric­ing Model

The dynam­ic pric­ing mod­el is a strat­e­gy where the price of a prod­uct changes based on fac­tors like demand, time, or mar­ket conditions. 

This mod­el allows busi­ness­es to adjust their prices in real-time to max­i­mize prof­its. For exam­ple, prices might be high­er dur­ing peak demand times, like hol­i­days or spe­cial events, and low­er when demand is slower.

Even so, we don’t like that this mod­el requires con­stant mon­i­tor­ing to ensure the right prices are set at the right time, which can be tiresome.

Dynam­ic pric­ing is com­mon­ly used in indus­tries like trav­el, hos­pi­tal­i­ty, and eCom­merce, where prices can fluc­tu­ate based on sup­ply and demand. 

For exam­ple, you have prob­a­bly noticed that hotel prices in places like Bali are high­er dur­ing peak sea­son and low­er in the off-sea­son when there’s less tourism.

Freemi­um Pric­ing Model

The freemi­um pric­ing mod­el offers a basic ver­sion of a prod­uct or ser­vice for free while charg­ing for pre­mi­um or advanced fea­tures. This strat­e­gy allows busi­ness­es to attract a larg­er user base by giv­ing away the core func­tion­al­i­ty for free and encour­ag­ing users to upgrade to paid plans for more advanced fea­tures or bet­ter performance. 

It’s com­mon­ly used in soft­ware, plu­g­ins, and online services.

Over the years, we have used this mod­el to price prod­ucts like PushEn­gage, Dupli­ca­tor, and Mon­sterIn­sights. We offer a free ver­sion of each prod­uct, and you can upgrade to the pro ver­sion if you want more features.

Bun­dle Pric­ing Model

The bun­dle pric­ing mod­el involves offer­ing mul­ti­ple prod­ucts or ser­vices togeth­er as a pack­age at a low­er price than if they were pur­chased indi­vid­u­al­ly. This encour­ages cus­tomers to buy more by giv­ing a dis­count for buy­ing in bulk. 

It is often used by online stores to increase sales, clear out slow-mov­ing inven­to­ry, pro­mote relat­ed prod­ucts, or boost rev­enue dur­ing the hol­i­day season.

For instance, Smash Bal­loon offers an all-access bun­dle deal at a bet­ter price than buy­ing each plu­g­in separately. 

This helps them boost sales and gives cus­tomers a feel­ing of get­ting more val­ue for their money.

Tiered Pric­ing Model

The tiered pric­ing mod­el is when a busi­ness offers var­i­ous lev­els of a prod­uct or ser­vice, each at a dif­fer­ent price with dif­fer­ent fea­tures. Each lev­el is meant for dif­fer­ent cus­tomer needs or budgets. 

For exam­ple, a mem­ber­ship web­site might offer three plans: a basic plan with lim­it­ed access, a mid-tier plan with more con­tent or ben­e­fits, and a pre­mi­um plan with full access to every­thing. This way, cus­tomers can choose the plan that best fits what they need and are will­ing to pay for.

As cus­tomers’ needs grow, they may upgrade to a high­er tier to access more fea­tures, which can increase rev­enue for your busi­ness over time.

Tiered pric­ing is com­mon­ly used in sub­scrip­tion-based ser­vices and mem­ber­ship sites.

Psy­cho­log­i­cal Pric­ing Model

The psy­cho­log­i­cal pric­ing mod­el uses pric­ing tricks to influ­ence cus­tomers and make prod­ucts seem more afford­able or valu­able. The idea is to set prices that trig­ger emo­tion­al respons­es and encour­age a purchase. 

A com­mon exam­ple is pric­ing some­thing at $9.99 instead of $10.00. Cus­tomers often see the price as clos­er to $9, even though it’s only a one-cent dif­fer­ence. This small change can make the prod­uct seem like a bet­ter deal, even if the dif­fer­ence is minimal.

Anoth­er exam­ple of psy­cho­log­i­cal pric­ing is offer­ing a “pre­mi­um” ver­sion of a prod­uct at a high­er price, which makes the reg­u­lar ver­sion look more afford­able. This is often done in online stores to per­suade cus­tomers to buy.

The goal of psy­cho­log­i­cal pric­ing is to make the price feel just right for the customer’s mind­set, encour­ag­ing them to make a pur­chase with­out feel­ing like they are spend­ing too much.

This mod­el is often used along­side oth­er pric­ing strate­gies, like cost-plus or val­ue-based pric­ing, to make your prod­uct seem more affordable.

Effective Tips for Pricing Your eCommerce Products

Pric­ing an eCom­merce prod­uct can be tricky because it is more than just pick­ing a rea­son­able num­ber. It involves under­stand­ing your costs, mar­ket, and cus­tomers’ will­ing­ness to pay.

Here are some effec­tive tips that can help you choose the right price for your eCom­merce products:

• Under­stand Your Costs: Before set­ting any price, you will need to cal­cu­late all costs involved in pro­duc­ing and sell­ing the prod­uct. This includes man­u­fac­tur­ing, ship­ping, mar­ket­ing, and plat­form fees. Know­ing your costs helps ensure that you are not under­pric­ing and los­ing money.
• Know Your Mar­ket and Com­peti­tors: It is cru­cial to research your com­peti­tors to see how they price sim­i­lar prod­ucts. If you plan to use the com­peti­tor-based pric­ing mod­el, then you will want to stay com­pet­i­tive with­out over­pric­ing or under­valu­ing your prod­uct. Make sure to con­sid­er any unique fea­tures or ben­e­fits your prod­uct offers com­pared to others.
• Con­sid­er Cus­tomer Per­cep­tion: You need to research and under­stand how much cus­tomers are will­ing to pay based on the per­ceived val­ue of your prod­uct. For this, we rec­om­mend doing cus­tomer sur­veys to find out what your tar­get audi­ence val­ues the most.
• Test Dif­fer­ent Prices: You can run A/B tests with dif­fer­ent price points and strate­gies to see which one per­forms best on your online store.
• Offer Dis­counts: If you are just start­ing your store, it’s a great idea to offer dis­count coupons to moti­vate cus­tomers to buy more, increas­ing your aver­age order val­ue. This is an effec­tive strat­e­gy for both bun­dle pric­ing and tiered pricing.
• Sea­son­al Trends: Remem­ber to adjust your pric­ing dur­ing cer­tain times of the year, like hol­i­day sales or sea­son­al pro­mo­tions. For exam­ple, you can low­er prod­uct prices dur­ing Christ­mas to increase conversions.

By com­bin­ing these tips, you will be able to price your prod­ucts accu­rate­ly and grow your business.

How to Price a Product in WooCommerce

If you are sell­ing phys­i­cal prod­ucts in WooCom­merce, the first step is to choose a pric­ing mod­el that aligns with your busi­ness needs. For most online stores, we rec­om­mend cost-plus pric­ing because it’s begin­ner-friend­ly and ensures your costs are cov­ered while leav­ing room for profitability.

How­ev­er, if your store oper­ates in a com­pet­i­tive mar­ket, such as cloth­ing, cos­met­ics, or home decor, then com­peti­tor-based pric­ing is the way to go. On the oth­er hand, you can con­sid­er a val­ue-based pric­ing mod­el for sell­ing pre­mi­um or unique items.

To deter­mine which mod­el is best for you, start by cal­cu­lat­ing all costs involved in cre­at­ing your prod­uct. Next, research sim­i­lar prod­ucts in the mar­ket to under­stand how com­peti­tors are pric­ing their items and use ana­lyt­ics tools to mon­i­tor your sales performance.

Once you have cho­sen the right mod­el, it’s time to price your prod­uct in WooCom­merce. For this, vis­it the Prod­ucts » Add New Prod­uct page from the Word­Press dashboard.

Once there, add a name, descrip­tion, and images for your item accord­ing to your liking.

After that, scroll down to the Prod­uct Data sec­tion where you can add the deter­mined price for your item in the ‘Reg­u­lar Price’ section.

If you want to offer dis­counts, enter the dis­count­ed price in the ‘Sale Price’ field. You can also sched­ule the sale to start and end on spe­cif­ic dates by click­ing the ‘Sched­ule’ link.

Once you are done, just scroll back to the top and click the ‘Pub­lish’ but­ton to store your set­tings. For more details on build­ing your store, see our com­plete WooCom­merce guide.

You can now vis­it your web­site to see the prod­uct live.

How to Price a Product in Easy Digital Downloads

When sell­ing dig­i­tal prod­ucts with Easy Dig­i­tal Down­loads, the right pric­ing mod­el can sig­nif­i­cant­ly affect your revenue.

For instance, val­ue-based pric­ing is an excel­lent choice for sell­ing dig­i­tal goods like soft­ware, plu­g­ins, or eBooks because it empha­sizes the per­ceived val­ue of your prod­uct to customers.

Freemi­um pric­ing is also a proven strat­e­gy, where you offer a basic ver­sion for free and encour­age users to upgrade to a pre­mi­um ver­sion with addi­tion­al fea­tures. On the oth­er hand, tiered pric­ing is a great fit if you offer mul­ti­ple ver­sions of soft­ware, with each lev­el unlock­ing new fea­tures or capabilities.

Over the years, we’ve suc­cess­ful­ly used both freemi­um and tiered pric­ing strate­gies to sell our plu­g­ins, and the results have been out­stand­ing. These mod­els have allowed us to cater to a wide range of users, from those seek­ing basic func­tion­al­i­ty to peo­ple need­ing advanced features.

How­ev­er, before you select a strat­e­gy, you must under­stand your tar­get cus­tomers and their will­ing­ness to pay for your prod­uct. You can use sur­veys or cus­tomer feed­back for that. We also rec­om­mend clear­ly com­mu­ni­cat­ing the unique ben­e­fits of your prod­uct on your web­site to jus­ti­fy its price.

That said, to add a prod­uct price in Easy Dig­i­tal Down­loads, you need to vis­it the Down­loads page and click the ‘Add New’ button.

This will open the block edi­tor, where you can add a name, descrip­tion, and image for your dig­i­tal item.

Next, scroll down to the “Down­load Files” sec­tion and upload the file you want to sell from your com­put­er. You can also give the file a name to help cus­tomers iden­ti­fy it.

Then, move to the ‘Down­load Details’ sec­tion, where you can add a price for your product.

You can also add vari­able pric­ing by check­ing the box at the top. This will allow you to set dif­fer­ent pric­ing tiers based on the product’s fea­tures or versions.

How­ev­er, if you choose this option, then you must scroll back to the ‘Down­load Files’ sec­tion and upload addi­tion­al files that cor­re­spond to each pric­ing tier.

Once uploaded, you can assign each file to the appro­pri­ate tier using the drop­down menu. 

For exam­ple, if one file con­tains the first 10 chap­ters of your eBook, then you can select the cor­re­spond­ing price tier and name it accord­ing­ly, such as ‘Chap­ters 1–10.’ This allows you to offer dif­fer­ent lev­els of access or con­tent based on the customer’s cho­sen price tier.

Final­ly, click the ‘Pub­lish’ but­ton at the top to store your set­tings. To learn more, see our tuto­r­i­al on how to sell dig­i­tal down­loads in Word­Press.

You can now vis­it your web­site to see the prod­uct in action.

How to Price a Product in MemberPress

When pric­ing sub­scrip­tions or mem­ber­ships in Mem­ber­Press, we rec­om­mend choos­ing the tiered, freemi­um, or usage-based pric­ing structures.

Tiered pric­ing allows you to offer dif­fer­ent mem­ber­ship lev­els with vary­ing ben­e­fits, which can appeal to a wide range of users. For exam­ple, you might have a basic, pre­mi­um, and elite sub­scrip­tion, each offer­ing addi­tion­al fea­tures or content. 

The freemi­um mod­el lets you offer free access to basic fea­tures with the option to upgrade to a paid plan for more advanced options. This mod­el can help attract a large user base and con­vert some of them into pay­ing members.

Sim­i­lar­ly, usage-based pric­ing charges users based on the fre­quen­cy or vol­ume of use, ide­al for ser­vices like SaaS platforms.

Each of these mod­els has its ben­e­fits depend­ing on your prod­uct and audi­ence, and Mem­ber­Press makes it easy to imple­ment them.

To add a pric­ing plan, you need to head to the Mem­ber­Press » Mem­ber­ships page and click the ‘Add New’ button.

This will open a new screen where you can add a name and descrip­tion for the mem­ber­ship plan. Then, add a price in the ‘Mem­ber­ship Terms’ section.

If you want to accept one-time pay­ments from cus­tomers, then you can just click the ‘Pub­lish’ button.

How­ev­er, to accept recur­ring pay­ments for the mem­ber­ship, choose the ‘Recur­ring’ option as the billing type.

This will open some extra set­tings where you can choose the billing inter­val for your mem­ber­ship plan from the drop­down menu. This is how often your mem­bers will be charged.

You can also offer a free tri­al by check­ing the ‘Tri­al Peri­od’ box. After that, you can spec­i­fy the dura­tion of the trial.

Final­ly, click the ‘Pub­lish’ but­ton to store your changes. You can now repeat the process to add oth­er sub­scrip­tion or mem­ber­ship plans to your website. 

For more details, see our tuto­r­i­al on how to accept recur­ring pay­ments in Word­Press.

Here’s a pre­view of the mem­ber­ship plan in action.

Bonus: Simplify Calculations for Custom Products With WPForms

Pric­ing can be chal­leng­ing for cus­tom prod­ucts. Unlike stan­dard prod­ucts with set prices, cus­tom items often have to fac­tor in each order’s unique specifications.

For instance, if you sell cus­tom t‑shirts where cus­tomers can choose the design, fab­ric, and oth­er fea­tures, it’s impos­si­ble to list a fixed price for each item ahead of time.

In these cas­es, a pric­ing cal­cu­la­tor becomes essen­tial to give shop­pers an esti­mate before they decide to make a purchase.

This cal­cu­la­tor will allow cus­tomers to enter their pref­er­ences and get an imme­di­ate price esti­mate based on their selec­tions. Cus­tomers can select the fab­ric, col­or, size, and addi­tion­al cus­tomiza­tions, and the form will auto­mat­i­cal­ly gen­er­ate an esti­mat­ed cost based on these options.

So, if you plan to sell cus­tom prod­ucts, we rec­om­mend adding a cost cal­cu­la­tor with WPForms. It is the best cal­cu­la­tor plu­g­in on the mar­ket, and it comes with a drag-and-drop builder and 2000+ pre­made tem­plates, includ­ing a ship­ping cost cal­cu­la­tor, instant esti­mate cal­cu­la­tor, dynam­ic pric­ing cal­cu­la­tor, and more.

We have used WPForms to cre­ate all kinds of forms for our web­sites, and it has con­sis­tent­ly deliv­ered great results. To learn more, see our WPForms review.

The plu­g­in even fea­tures an AI builder that lets you type in a prompt describ­ing the kind of cost cal­cu­la­tor you need for your web­site, and the AI will cre­ate it for you automatically.

For instance, to cre­ate a cost cal­cu­la­tor for a cus­tom prod­uct, you can use the fol­low­ing prompt:

Create a cost calculator form for a custom product where customers can get an immediate price estimate. The form should include the following fields:

A dropdown for selecting the fabric type (e.g., Cotton, Polyester, Silk) with different price points.

A color selector with no additional cost.

A dropdown for size options (e.g., Small, Medium, Large), each with a different base price.

Checkboxes for additional customizations (e.g., Add a logo, Custom text) with fixed extra costs.

A quantity field to calculate the total price based on the selected options and the number of items.

Include real-time price calculation and display the total price dynamically at the bottom of the form.

WPForms’ AI Builder will then gen­er­ate a form for you. 

If you are sat­is­fied, just click the ‘Use This Form’ but­ton to launch it in the form builder.

Once there, you can eas­i­ly edit, rearrange, or delete form fields to suit your needs. The AI will have already added the cal­cu­la­tion fields for you, so you don’t need to wor­ry about set­ting those up yourself.

Final­ly, just click the ‘Save’ but­ton at the top to store your settings.

You can now add the prod­uct cost cal­cu­la­tor to your web­site with the WPForms block. 

To learn more, see our beginner’s guide on how to cre­ate a cus­tom cal­cu­la­tor in Word­Press.

Frequently Asked Questions About Pricing Products

Here are some ques­tions that are fre­quent­ly asked by our read­ers about pric­ing an eCom­merce product:

How can I test and adjust my pric­ing strategy?

To test and adjust your pric­ing strat­e­gy, you can start by exper­i­ment­ing with dif­fer­ent price points to see how they affect your sales.

One com­mon method is A/B test­ing, where you offer the same prod­uct at dif­fer­ent prices to sep­a­rate groups of cus­tomers and com­pare the results. You can also use tools like Mon­sterIn­sights to track changes in con­ver­sion rates and cus­tomer behav­ior after adjust­ing your prices.

We also rec­om­mend pay­ing atten­tion to cus­tomer feed­back and ana­lyz­ing your com­peti­tors’ pric­ing strate­gies. You can then adjust your prod­uct prices based on fac­tors like demand, mar­ket trends, and how your cus­tomers per­ceive your product.

How can I choose the best pric­ing mod­el for my products?

Choos­ing the right eCom­merce pric­ing mod­el depends on sev­er­al fac­tors, includ­ing your prod­uct type, busi­ness goals, mar­ket con­di­tions, and cus­tomer preferences. 

For instance, if you sell prod­ucts sim­i­lar to your com­pe­ti­tion, then com­peti­tor-based pric­ing might be suit­able. If you offer pre­mi­um or unique items like home­made prod­ucts, val­ue-based pric­ing could help you cap­ture high­er margins.

How­ev­er, if you are look­ing for a sim­pler approach, then cost-plus pric­ing ensures you cov­er your costs while earn­ing a prof­it. You can also exper­i­ment with a com­bi­na­tion of mod­els to see what works best for your spe­cif­ic market.

Can I change my pric­ing mod­el later?

Yes, pric­ing mod­els can evolve as your busi­ness grows or as mar­ket con­di­tions change. 

For exam­ple, you might start with cost-plus pric­ing when you are test­ing your prod­uct and lat­er switch to val­ue-based pric­ing as you bet­ter under­stand your cus­tomers’ will­ing­ness to pay.

Even so, we rec­om­mend clear­ly com­mu­ni­cat­ing any changes to your pric­ing plan with your cus­tomers to avoid con­fu­sion or frustration.

Is psy­cho­log­i­cal pric­ing always effective?

Psy­cho­log­i­cal pric­ing, like end­ing prices at .99, is wide­ly used and can improve sales by mak­ing prices feel more affordable. 

How­ev­er, its effec­tive­ness depends on your tar­get audi­ence and the type of prod­uct you sell. For high-end lux­u­ry prod­ucts, this tac­tic may not work well, as cus­tomers might per­ceive prices like $999.99 as less premium.

That is why we rec­om­mend using psy­cho­log­i­cal pric­ing with cau­tion and con­sid­er­ing your tar­get audi­ence before mak­ing any changes.

We hope this arti­cle helped you learn how to eas­i­ly price an eCom­merce prod­uct. You may also want to see our beginner’s guide on how to choose the best prod­ucts to sell online and our top picks for prof­itable eCom­merce busi­ness ideas for Word­Press.

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The post eCom­merce Price Mod­el — How to Eas­i­ly Price a Prod­uct first appeared on WPBe­gin­ner.