Do you know the actual worth of your products? How do you price your products? What strategy is best to choose that can help you determine the product price? With the emergence of greatly competitive pricing tools, determining the most profitable and customers winning worth of a product can be a daunting task for ecommerce retailers.
Online retail stores are using competitive pricing to compete better with their rivals and attract increased number of customers with analytical approach for online pricing. By considering all hidden business scenarios which can occur in eCommerce. Also, smart and competitive pricing tactics help an eCommerce business do better than their competitors. Here are 6 tips that will assist you building an ecommerce pricing strategy:
1. Stay Competitive Profitable
It is true that the lowest price does not always work. Sometimes, online stores are in trouble just because of very low prices. Despite having a good number of customers, you still may not gain much profit. If you have decided to lower your price to a point where you are losing money, you must look for another source, or amend your product offerings so that you can make profits.
Also, when you constantly keep your price low, consumers will always look for the lower price, even when your business will not able to be sustained. Therefore, you may lose those customers over time.
2. Know your USP (Unique Selling Proposition)
Every brand has something that makes them different and helps determine their value proposition and target market. Identifying your USP is significantly essential for pricing your products, helping you navigate through the competition. It helps customers to choose you over others competitors. For ecommerce businesses, there are many things that make a business stand out of the crowd like excellent customer service, easy return policy, free, or product you can't find anywhere and more.
Since there is a great competition with pricing, business owners need to be very innovative, informative and creative when building a marketing or promotional strategy for their ecommerce store. Furthermore, they are required to understand market demand and current trend.
3. Sell on Value
Value-based pricing is always good and make certain that your customers are paying for the value they are getting. Using this ecommerce pricing strategy, your customers can get most desired experience and something that is much near to their expectations.
Customer communication is a great way to know more about your customers and collect the information that you require to implement value-based pricing. Value-based pricing powers your business and helps strengthen customer relationships.
This works both for you and your customers as the customers happily pay for the value they get. Having a strong communication with your customers will always improve value.
4. Lose-Leader (Selling Below Market Value)
If you use the appropriate merchandising strategy, greatly discounted pricing can do wonders to your business. As per the Lose-Leader Strategy, when you sell an item below market value, the customers increase the number of items to be purchased. With this strategy, online store owners have chances to upsell, cross sell and more. It may not offer great profits to buyer but stimulates customers acquisition, opening the door for further marketing efforts.
5. Offer Incentives
You must know your margins first, and price accordingly. It will help you offer incentives to encourage your customers to buy. Even if it is not possible to provide incentives for long term, limited time offer is also a good way to acquire new customers.
Make sure to use the language that can attract customers easily. If you have products in good amount, you can offer different kinds of incentives, including Buy one get one free or Buy one get one 50% off and more. You can even hire ecommerce development solutions to help you with it.
6. Diversify Product Offerings
Once you research market well, and understand the demand, you can offer a diverse product offering. You need to stay updated with the current trends. To be updated you can read ecommerce news and also can use “Google Trends” or “Google Insight” to find out the popularity of a SKU. Knowing your customers better, understanding their needs, desires well, provides you the opportunity to sell and make profit from diversified products.
7. Test Your Ecommerce Pricing Strategy
Since there are many things in ecommerce, one size does not suit with everything. Therefore, it is vital to determine and check the success of changes you do to your online store's pricing strategy. It is essential to test and validate every change using an analytics tool like Google Analytics, Mixpanel.