Pricing Strategy (Global)

> Price is the most leveraged decision in marketing. A 1% price increase typically yields a 10%+ profit improvement (Bain). Currency psychology, decimal conventions, and installment culture differ HUGELY by region.

For newbies

Who is this skill for?

| Audience | Concrete example | |----------|------------------| | Founder setting initial pricing | First product launch, no historical data | | DTC brand optimizing pricing page | Already selling, want to lift conversion or margin | | SaaS deciding tier structure | Free / Pro / Enterprise; monthly vs annual | | Dropshipper calculating markup | Importing from supplier, selling DTC | | Service business packaging offers | Coaching, consulting, agency retainers |

Who is this NOT for?

• Vietnam-only pricing -> Use 17-pricing-strategy (VN skill) — covers VND psychology
• Already at scale with strong data team -> You probably have proprietary models; this skill gives you starting frameworks

30-second pre-read

This skill produces ONE pricing strategy file with 7 components: pricing model selection, price ladder design (3-5 tiers), charm/anchor/decoy mechanics, break-even analysis, competitor benchmarking, A/B test plan, and pricing page layout. Pick 1 of 4 region variants — the variant tunes currency formatting, decimal convention, charm pricing styles, and installment culture.

3 common errors

1. Using US charm pricing in EU -> EU shoppers see $9.99 as "American" not "low" — feels foreign
2. Ignoring installment culture in LATAM -> "BRL 1,200 to MXN 8,000" pricing flops without "12x R$100" or "8 cuotas sin intereses"
3. Underpricing dropship products -> 2x markup leaves no room for ad spend; need 3-5x minimum

Why do you need this skill?

Without pricing strategy:

• Charm formatting wrong for region -> "feels off" -> conversion drop
• No anchor -> middle tier doesn't feel like value -> wrong tier wins
• No installment option in LATAM -> abandoned cart 60%+
• Dropship markup too thin -> can't afford ads -> stalls
• No charm psychology in B2C -> leaving money on the table

Pick the right region defaults, apply proven frameworks, layer on dropshipping math when relevant.

Workflow

Step 0: Check global context file
    |-- exists -> read product / customer / region info
    |-- missing -> suggest user run product-marketing-context-global first
Step 1: Pick region variant (US / EU / SEA / LATAM)
Step 2: Choose pricing model (One-time / Subscription / Tiered / Bundle / Freemium / Pay-as-you-go)
Step 3: If dropshipping product -> apply markup math (this file, see below)
Step 4: Design price ladder (3-tier with charm + anchor + decoy)
Step 5: Calculate break-even
Step 6: Compare with 2-3 competitors
Step 7: Write pricing page copy + A/B test plan

Step 0: Check global context

Check .agents/product-marketing-context-global.md:

• Yes -> Read product, customer, region. Do NOT re-ask.
• No -> Suggest running product-marketing-context-global first.

Step 1: Pick region variant

Ask: "Which is your PRIMARY region: US, EU, SEA, or LATAM?"

Where do you primarily sell?
    |-- US / Canada            --> 01-us.md    (USD, charm $9.99, monthly subs)
    |-- EU / EEA / UK          --> 02-eu.md    (EUR, charm EUR 9,99, VAT-inclusive)
    |-- Southeast Asia         --> 03-sea.md   (SGD/MYR/IDR/THB/PHP, discount-heavy)
    |-- Latin America          --> 04-latam.md (BRL/MXN/ARS, parcelado / cuotas common)
    |-- Vietnam only           --> Use `17-pricing-strategy` (VN skill)

Step 2: Pricing models

| Model | Best for | Examples | |-------|---------|---------| | One-time | Physical products, courses | T-shirt, ebook, lifetime license | | Subscription | Recurring value, software | SaaS, streaming, gym, supplement | | Tiered | Differentiated buyers | SaaS Free/Pro/Enterprise | | Bundle | Bigger AOV, perceived savings | Spa package, software bundle | | Freemium | Large funnel, low conversion | Slack, Zoom, Notion | | Pay-as-you-go | Variable usage | Cloud, API, AWS | | Hybrid | Combination of models | Subscription + add-on usage credits |

Step 3: DROPSHIPPING MARKUP MATH (CRITICAL)

> This section applies only if you're sourcing products from suppliers (AliExpress, Spocket, CJDropshipping, etc.) and reselling DTC.

The 3-5x markup rule

Dropshipping requires HIGH markup because:

• Ad spend is ~40-60% of revenue (paid acquisition is your only growth channel)
• Returns/refunds: 5-10% loss
• Payment processing: 2-3% per transaction
• Platform fees (Shopify): 1-2%
• Customs/duties (if cross-border): 5-15%

If your markup is only 2x cost, you have ZERO budget for ads. You need 3-5x minimum.

The math

Cost from supplier:    USD 5.00
Shipping to customer:  USD 3.00
Total cost:            USD 8.00

Sale price:            USD 29.99 (3.75x markup)

Revenue:               USD 29.99
- Cost                 USD 8.00
- Payment processing  USD 0.90 (3%)
- Platform fee         USD 0.30 (1%)
= Gross profit         USD 20.79
= Gross margin         69.3%

Of that USD 20.79 gross profit:
- Ad spend cap         USD 14.55 (70% of profit)
- Operations           USD 2.08 (10%)
- Net profit           USD 4.16 (~14% net margin)

Break-Even ROAS (BE-ROAS) formula

BE-ROAS = 1 / (1 - cost/sale_price)

Example:
- Cost USD 8, sale USD 29.99
- cost/sale = 0.267
- BE-ROAS = 1 / (1 - 0.267) = 1 / 0.733 = 1.36x

Translation: Your ads must return AT LEAST USD 1.36 for every USD 1 spent
just to break even. Profitable target: 2.5x or higher.

Markup tiers by product price

| Product cost | Recommended markup | Sale price | BE-ROAS | Profit ROAS target | |-------------|-------------------|-----------|---------|-------------------| | < USD 5 | 5-10x | USD 25-49.99 | 1.25x | 2.5x | | USD 5-15 | 4-5x | USD 49-79 | 1.40x | 2.7x | | USD 15-30 | 3-4x | USD 79-129 | 1.55x | 3.0x | | USD 30-60 | 2.5-3x | USD 129-199 | 1.75x | 3.2x | | USD 60+ | 2-2.5x | USD 199+ | 2.0x | 3.5x |

The dropshipping price ladder

Free shipping threshold:  USD 50  (push AOV up)
Lead-in product:          USD 19.99 (small impulse buy, charm)
Core product:             USD 39.99 (target sale, charm)
Premium variant:          USD 79.99 (anchor + upsell)
Bundle:                   USD 99.99 (3 products, "save 25%")

Step 4: Design price ladder (universal — non-dropship)

Standard 3-tier structure

Goi 1 - Basic / Starter:    [low charm price]   - 3-4 features  - "Try free"
Goi 2 - Pro / Standard:     [middle anchor]     - 7-8 features  - "Most popular" badge
Goi 3 - Premium / Enterprise: [high price]      - All features  - "Contact sales"

Charm pricing (apply per region — see variants)

• US: $9.99 $29 $99
• EU: EUR 9,99 EUR 29 EUR 99
• SEA: S$9.90 RM39 Rp 99,000
• LATAM: R$ 99 MX$199 12x R$ 33 (parcelado)

Anchor effect

Goi Premium:  USD 199  (anchor — rarely sold)
Goi Pro:      USD 99   (target — 60-70% choose)
Goi Basic:    USD 29   (entry — price-sensitive)

Decoy effect (3-option trap)

A. Digital only:        USD 50  (poor value)
B. Physical only:       USD 120 (decoy - close to C, less value)
C. Digital + Physical:  USD 130 (target - "+USD 10 gets BOTH")

Add decoy B -> ~3x lift in choosing C vs. without decoy.

Step 5: Break-even analysis

Break-even units = Fixed costs / (Price per unit - Variable cost per unit)

Example:
- Fixed costs:        USD 30,000/month
- Sale price:         USD 99
- Variable cost:      USD 39 (cost + shipping + processing)
- Contribution:       USD 60
- Break-even:         500 units / month

Step 6: Competitor benchmarking

Compare with 2-3 direct competitors:

| Competitor | Their price | Their feature | Your price | Your feature |
|------------|-------------|--------------|------------|--------------|
| Comp A     | USD 89      | [feature]    | USD 99     | + extra      |
| Comp B     | USD 129     | [feature]    | USD 99     | + extra      |
| Comp C     | USD 79      | [feature]    | USD 99     | premium tier |

Pricing positioning vs. competitors

• Premium (+20% or more above): Justify with quality/result/brand
• Parity (within +/- 10%): Win with feature/service/UX differentiation
• Value (-15-25% below): Win with operational efficiency, not loss-leading

Step 7: Pricing page + A/B test plan

Pricing page must-haves

| Element | Why | |---------|-----| | 3 tiers (not 1, not 4+) | Easy comparison; 3 is the sweet spot | | Highlight middle tier | Anchor + decoy effect | | Monthly / Annual toggle | Annual locks in cash; -15-20% discount | | Feature comparison table | Decision support | | FAQ | Address pricing objections | | Customer testimonial | Social proof | | Trial / refund policy | Risk reduction | | Visible price (B2C) | "Contact sales" kills B2C conversion |

A/B test priority

1. Price level (e.g. USD 29 vs. USD 39 — biggest impact)
2. Charm format (USD 29 vs. USD 29.99)
3. Tier structure (2 vs. 3 tiers)
4. Annual discount % (15% vs. 20% vs. 25%)
5. CTA copy ("Start free" vs. "Try Pro free")

Run each test for 2 weeks minimum, 95% confidence.

Output template

markdown
# Pricing Strategy - [Brand]
Region variant: [US / EU / SEA / LATAM]
Currency: [USD / EUR / etc.]
Date: [YYYY-MM-DD]

## 1. Pricing model
[One-time / Subscription / Tiered / Bundle / Freemium / Pay-as-you-go]

## 2. Price ladder

| Tier | Price | Target buyer | Features | CTA |
|------|-------|--------------|----------|-----|
| Basic | X | Price-sensitive | [...] | "Try free" |
| Pro | Y | Target buyer | [...] | "Most popular" |
| Premium | Z | Anchor + premium | [...] | "Contact sales" |

## 3. Charm / anchor / decoy mechanics
- Charm: [region-appropriate format]
- Anchor: [premium tier explanation]
- Decoy: [if used]

## 4. Dropshipping markup (if applicable)
- Cost: USD X
- Sale: USD Y
- Markup: Nx
- BE-ROAS: 1.Xx
- Target ROAS: 2.Xx

## 5. Break-even
[Formula + monthly target]

## 6. Competitor positioning
[Premium / Parity / Value]

## 7. Pricing page layout
[3 tiers + comparison + FAQ + testimonial]

## 8. A/B test plan
[Test 1, Test 2, Test 3 with metrics]

Quality checklist

• ] Region variant chosen + currency formatted correctly
• ] 3 tiers (not 1, not 4+)
• ] Middle tier highlighted (anchor + decoy)
• ] Charm pricing applied per region convention
• ] If dropshipping: markup >= 3x cost, BE-ROAS calculated
• ] Break-even units / month documented
• ] 2-3 competitors compared
• ] Pricing page mockup or wireframe
• ] A/B test plan with success metric
• ] Installment / financing option for LATAM/SEA where relevant

Related skills

• product-marketing-context-global — foundation
• 16-marketing-psychology-global — anchoring, scarcity, framing
• 29-dropshipping-mastery-global — for dropshipping deep-dive (when available)
• references/global-currency-pricing — deep currency reference

Global Skill 17 (Pricing Strategy) | Over Powers Agency | v1.0.0