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How to Price a Digital Product Without Guessing

Price is the decision most founders spend the least time on and the one that moves profit the most. A calmer way to set it.

By The Digital Owner staff · 7 min read

Most people price a digital product by looking at what a competitor charges and going a little lower. It feels safe. It is usually the most expensive choice they make.

This piece covers why price matters so much, what real pricing data says, and a practical way to choose a number you can defend.

Price is the biggest lever you have

In 1992, Michael Marn and Robert Rosiello of McKinsey published "Managing Price, Gaining Profit" in the Harvard Business Review. Using the average economics of 2,463 companies, they showed how much operating profit changes when price moves by 1%. Their headline finding has been quoted in pricing books ever since: a 1% price improvement lifted operating profit by about 11%, more than the same improvement in volume or costs. They also warned that the lever cuts both ways. A 1% price decrease would destroy a similar share of profit.

Those were large, established companies, not solo digital businesses. The principle still holds. When your costs are mostly fixed, which is true for most digital products, almost every extra dollar of price falls straight to profit.

When your costs are mostly fixed, almost every extra dollar of price falls straight to profit.

Most people barely think about it

Patrick Campbell, co-founder of Price Intelligently and later ProfitWell (now part of Paddle), spent years studying how software companies set prices. His research, reported by Mind the Product, found that companies spend 10 hours or less per year on pricing. In an interview with Silicon Republic, he put the average at around eight hours.

If businesses with pricing teams and data spend that little time on it, a first-time founder probably spends less. That is the gap to close.

What digital products actually sell for

There is useful public data here, as long as you read it carefully.

Kajabi, a platform for courses and coaching, published an analysis of pricing across its sellers. It reported that the median price of a new digital product on Kajabi rose from $144 in 2023 to $179 so far in 2026.

That number describes one platform with one type of seller, mostly experts selling courses, memberships and coaching. Platforms built for small file downloads show much lower medians. The lesson is not "charge $179." The lesson is that price ranges vary hugely depending on what you sell and who buys it.

Three ways to set a price

Cost-plus

Add up your costs and add a margin. This works for physical goods. For digital products, your cost per sale is close to zero, so cost-plus pricing tends to produce numbers that are far too low.

Competitor-based

Look at what similar products charge and position yourself against them. This is a useful reference point. It is a poor final answer, because you are copying a decision someone else may have got wrong.

Value-based

Price against the outcome the buyer gets. Paddle describes value-based pricing as its preferred approach. It is also the hardest, because you need to understand what the result is worth to the buyer. Paddle's own research notes that willingness to pay depends on what problem the customer is solving, not just their size.

A practical way to choose

Start with the outcome

Write down what the buyer gets if the product works. Save time? Make money? Avoid a costly mistake? Put a rough figure on it, from the buyer's point of view.

Ask, do not assume

Paddle's material describes the Van Westendorp Price Sensitivity Meter, which asks buyers four questions about price: at what point the product feels too expensive to consider, expensive but still worth it, a bargain, and so cheap they would doubt the quality. You can run a simple version in your buyer conversations. The overlap between answers shows you a sensible range.

Pick a number and test it

Choose a price in that range and sell. Watch who buys, who hesitates, and what they say. Raising a price later is uncomfortable but possible. Learning that you were priced too low after a year of sales is worse.

Be careful with discounts

Discounts are easy to start and hard to stop. Buyers who learn to wait for a sale will keep waiting. If you use them, give them a clear reason and an end date.

What to avoid

The calm version

Pricing does not have to be a guess. Spend real hours on it, look at real data, talk to real buyers, and choose a number you can explain. Then review it on a schedule rather than when you feel nervous.

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