Years ago I started a website content business (selling ghost-written articles to blogs). Back then it worked out for me because it was simple — I would advertise my services without having to hard-sell my prospects and I would get orders.
My customers were always ecstatic at the final product — they loved the content and many of my customers would end up setting up a weekly or monthly standing order.
There was one problem: I wasn’t making that much money. I had severely underpriced my product (often times only making a few dollars in profit from an order) because I didn’t really believe in my business. Unfortunately this led to me working way too much to pull in a measly amount of money.
I’m pretty sure it was a combination of not knowing a lot about business (I was only 16 at the time) and not knowing how to competitively price a product.
In the end, I pulled around $2,000 in profit from this business during my junior year of high school… and at the time I was happy, because it seemed like I was making a lot of money. It turns out I was working extra hours and only making 1/10th of my true potential on each sale.
Find out the branding strategy I used to increase my prices (and revenue) by 1000%:
Small Business Economics
Supply and demand are often touted by ignorant people who don’t understand economics. Until a few weeks ago, I was one of those people. I never realized that increasing your prices could actually lead to significantly increases sales and profit.
I’ll spare you a boring lecture — but here’s the sparknotes version of what I’m talking about: In Econ 101 a ‘normal’ good is a product that people purchase more of as their income levels increase and vice versa. On the other hand, an ‘inferior’ good is one that people actually purchase less quantity of as their income increases and vice versa.
Here’s my hypothesis: With my old website content business I was making my product an inferior good. I was undervaluing my product, causing people to think I was selling a crappy product (even though I was actually providing an enormous value for the price).
Challenging Myself To Doing A Better Job
Now — I closed the business roughly a year ago because my other business ventures were starting to take off, and it just wasn’t worth my time. Recently, I came up with the idea to re-open my business to see if I could do a much better job.
After analyzing what I did wrong last time — I decided that I could probably open a new website content service, charge more money, brand myself the correct way, and make a lot of money without even working that hard. Remember — I like to work smart not hard.
The Results And How I Accomplished Them
Remember I had two goals: more profit and less work.
Here’s what I did differently the second time around:
- Changed my price per article to $50 (It used to be $5, and I was only getting $4 after paypal fees)
- Branded 100% of my marketing efforts as a “premier, high-quality, and exclusive” service
- Targeted niche-relevant forums (webmaster and internet marketing forums) where I knew my customers hung out
- Stood firmly behind my pricing — never giving into people seeking lower-priced services
Originally, I wasn’t sure how well my service was going to do the second time around. I was actually competing against people still selling those same $5 low-quality articles… and I wasn’t sure if I could grab the top 5% or so of the market to pull in the high-dollar orders.
I accepted the fact that I wasn’t going after the customers of the lower-priced services… in fact, I wasn’t even competing against those services. My service was in a completely different league and all I had to do to make the sales was convey that message to my potential customers.
I made sure to utilize high-quality conversion oriented web design, persuasive copywriting, solid customer support, and provide an amazing value to my customers.
So What Happened?
The first few days after I launched my service I was greeted with a lot of angry people. (Keep in mind I was only marketing on forums during this period, so anyone could comment/post/message me directly about the service.)
“Do you realize you are charging 10x the normal price for articles?”
The majority of the people posting in my sales thread on the first day were the other website content sellers that were pissed off.
Can you blame them? I was disrupting the entire market equilibrium of their industry. The funny thing is that I was also getting angry messages from potential customers that kept asking me for a discount, or a lowered-rate… usually with some bullshit attached to it like “if you write me a few 50% off articles, I’ll recommend you to all my friends.”
Anyway — the first day really sucked… I didn’t make any sales and I had to deal with a lot of angry people. Now that I’m thinking about it, I’m pretty sure the people were angry because they wanted access to my service but didn’t want to pay the higher-rate. I guess that just means I did a good job of branding myself as the authority?
Well, after a few days and a small promotion I ran on the forum to get reviews, the orders started flying in.
The reviews started coming in — all 100% positive — raving reviews saying how this service was completely worth the price.
At that point, I had another key piece of the selling equation: social proof. Instead of having to go around and tell everyone I was the best, now I had members of their community posting the exact same thing, but it comes off as more credible when you hear a review from a ‘friend.’
Success: I’ve Got A (Small) Profitable And Scalable Business
So the service has been running for a few weeks now and I’m already about $500 in profit, I’ve automated the ‘sales funnel,’ lead generation, and payment process. (if you can even call a Wufoo Form integrated with mailchimp and paypal that).
Here’s the best part, the business is 100% scalable. I can outsource 100% of the content creation to my team of writers… meaning I have one job: sales and management.
So if I want to spend a little more money in the future and test out new marketing sources, I can scale this business up without having to spend 40 hours a week working my ass off for barely any profit.
I’m pretty happy with my (super) small-business at the moment. I’m only spending 2 hours a week working on it, and even that small amount of time equates to between $100-400 in profit per week.
Tools To Help You Increase Sales
There are several tools that you can utilize to help you with optimizing traffic and conversions to generate sales.
Soldsie + Have2Have.it: If you’re looking to take advantage of your social following and sell on Instagram then these are the tools to use. Soldsie is a social commerce platform that allows you to generate invoices to people who comment on your photos. (Check out our Soldsie review). Have2Have.it gives you a shoppable page that looks and feels just like your Instagram account – you just put the Have2Have.it link in your Instagram bio and that’s it.