I have a product that I plan to sell online. I can sell the product for $25 each doing the advertising myself and earn a fair profit.
The product can easily demand more than $25 and selling it for $25 may cost some sales to people who may think it should cost more and will be wary of a $25 price. But I can probably sell a quantity for $25 and get word of mouth sales because of the good price - good from the customer's viewpoint.
Another approach is to sell the product for $75. It could easily demand $75 based on the competition. I could then pay others, through an affiliate program or other arrangements, up to $50 per sale and still have my $25. The $50 per sale bounty would motivate others to sell for me. At $75, the price is close enough to my competitors that I would lose some sales to people who would have otherwise purchased the product for $25.
This is a digital product, delivered online, so I don't have "real world" packaging/shipping concerns.
Any thoughts or suggestions on which pricing strategy to implement will be appreciated.
We do a lot of price adjustments for the very reasons you've mentioned. As long as your copy is good enough to show people they are getting quality for the lower price, you'll be fine - it will improve sales. There's also nothing wrong with selling it for the price you want while letting your affiliates sell it for the price they want. For example, you sell the product for $25 (or $30 or whatever) and allow your affiliates to sell it for $75 and make $50 on the sale. I would also suggest that with your sales you start high and work your way down. That will give you the opportunity to run "monthly specials" in the future - for example drop from $40 to $25 in the month of June. This tactic works well. If you don't have a dedicated registration site that allows you to easily display different information based on referrer parameter for affiliates to truly set any price they want, then you can easily create 2 websites as suggested above - one with $25 (30,40) and one with a higher price - let the affiliates choose where they want to send the traffic - if they make a sale on the $75 site they get $50, if they make a sale on the $40 site they get $15.
That depends on how concerned you are with developing a search engine presence and getting organic traffic. If this is a big priority take one site and make it a larger site with a good amount of content, build backlinks, etc. The other can just be a few page-strict ecomm site. If organic traffic isn't a big concern (i realize it's always a bit of a concern), then they can be almost exactly alike if you want. Either way, create one however you want and then don't spend more than a day or so creating the second one - this one you'll only use for your affiliates, direct mail campaigns, ppc campaigns, etc.