The Right Way To Price Your Products Competitively on Your E-Commerce Store
While you’re busy working at giving your customers the best experience on your online store, creating coupons for offers and handling their complaints and requests for return/exchanges, there might be something you may have forgotten to focus on. Pricing. The way you price your product affects about 60% of the purchase decision. So it makes sense to actually put some effort and thinking into pricing your products effectively so you can manage to keep your profits while giving customers the best deal.
So if pricing products on your store is something of a hassle, you’ll appreciate what we have for you below. Here’s how you can price your products, maintain a profit and keep up with your competition.
Market Driven Pricing.
Pricing your product according to market sentiment is the best way you’ll compete with your competitors while not undercutting or eating into your profit margin. You’ll need to assess where you stand in the market against your competition. What are their prices? What is the difference? Are they offering better quality for a higher price that sits well with your customers.
These are some crucial factors you have to examine to determine if you can price competitively. There are automation tools that let you adjust your prices according to a drop or rise in your competitor’s prices.
Balance Profitability With Competitiveness
Profit is the ultimate goal of your business. When you’re trying to trail your competitor’s prices, you need to make sure that you don’t undercut so as to eat into your profit margin. You can adjust your prices to suit the market average.
If you find your prices are a little above the market average, you can adjust them; not by reducing the price of your product but by working on an over all cost-cutting strategy first. When you’ve cut down on superfluous elements, you an offer discounts to your customers. This way you’ll better be able to handle lower-priced products without compromising on your profits.
Study how different brands are priced on your competitor’s store
Technology is now available to compare brand pricing strategies in different retail businesses. You can go about it by grouping products of similar category level, or brand level in your competitor’s store into a group and calculate the average price of the level.
You can then automatically compare it with the average price you’re charging for the similar brand level in your store. This will give you an idea who has the pricing advantage and how much to set the price for a particular level of products.
Gain a pricing advantage by acquiring out-of-stock products
The one thing that beats a well-priced product is availability. Customers often get frustrated when they see a product they like but it isn’t in stock just then. At that moment they’re willing to spend a little more just to get their hands on it. And this could be a big advantage for your pricing scheme, IF you have a stock availability for the product.
Again a lot of technology out there will help you gain an inside scoop on the stock availability in your competitor’s store. Accordingly you can work fast to acquire and increase the stock of the product on your store. You’ll be able to price it higher since there will be a demand for the product and customers cannot acquire it elsewhere.
Odd pricing your product
Your customers are price sensitive. That’s why marketers came up with Odd pricing tactics. Let’s say you’re have a sweatshirt on your store valued at $20. Now a good marketer will set the price of that sweatshirt at $19.99. This is because he knows that a pricing like this is more effective in getting the customer to purchase. Customers are more focused on the significant first digits of the product. Odd pricing it this way also nudges the customer into thinking that product is priced as low as it can go.
These are some strategies you have got to focus on in setting the right price for your store. So it’s over to you now. Tell us if these tips worked well for you.
If you’re looking for a shopping cart extension that helps you with your ecommerce store management, you can try out J2Store. You’ll be able to set up prices easily, create special price catalogs, collect a donation on a product and charge an additional fee as well.
