For those unfamiliar with Codecanyon, it is one of many hugely popular online marketplaces from Envato, a company whose story is well worth studying for their...View More rise to expansion & market domination. What I've always secretly hated, yet admired about Envato (as a marketer) is their pricing strategy. Although independent authors are the ones who set prices & sell through their sites, Envato dictates how you pay & they do it differently than most. As you can see in this example, you are given an option to buy from your Envato credits or pay directly through Paypal which is always $2 more. This would make buying from Envato credits seem like a no-brainer, but the catch is, if you buy through credits, you must purchase at least $20 worth and larger options are in increments of 10 so $20, 30, 40 etc. Basically, they are not only enticing you to pay more than you expected, but also come back & buy again since you'll likely have extra money leftover. Being a web developer as well as a marketer, I've bought tons from them & it's worked on me every time.
Pricing Strategy from Codecanyon (Envato) Swiped in June 2014
This strategy is a great example of encouraging larger & more frequent purchases - two goals you should focus on in your business.
It particularly works for Envato because they have an ever-growing marketplace of products that users continually revisit for new releases & uses. In other words, it's not as effective if you have a small selection to choose from or don't plan on releasing new products.
It also works for them because asking for at least $20 is not unreasonable, especially when most users are used to spending that much there. You might be able to make it work for large transaction sizes, but the resistance would be higher unless they are planning to purchase again & there is a benefit in buying credit vs. purchasing right out.
Which brings me to the biggest takeaway - this strategy would be powerless without the $2 Paypal premium. It's a small differential, yet big enough where buyers will seriously consider buying credit. As with any option you want your prospect to take, there needs to be a benefit.
Mike Schaueris the founder of Swiped.co and the main analyst in the swipes section. After intently studying & building conversion-focused websites for 6+ years, he started Swiped to help others master marketing & copywriting through the analysis of great examples!
Visit the archives of this swipe's source URL or view past screenshots of codecanyon.net below.