How To Improve Ecommerce Profitability: 2 Pricing Strategy You Should Know

As an ecommerce business owner, you know that increasing your average order value is a key factor for seeing increases in profits and sales.

One smart way to do this is through product bundling.

Product bundling is a pricing strategy that relies on appealing to consumers’ psychological and economic impulses. By combining products into one package, buyers are more likely to make the purchase because it’s seen as an investment in value.

Why not sell more products, instead of just one? You could go with four, five, or even six.

By making your products more valuable, you will sell them more and make customers happy.

This way you can increase your total sales and profits. Your customers spend less time comparing products, making decisions, and comparing with competitors.

Offering product bundles will provide you with a significant advantage in terms of value perception and branding. When done correctly, bundles can increase revenue, lead to cost savings, as well as improve average order values.

While it is important to critically examine your own data in order to determine what products work well together and which ones provide the best customer experience and financial return, don’t forget that you should also consider bundling these items together.

For example, many products require accessories. Some are mandatory and some are highly desired, but optional, like a tripod for a camera. Bundling products of a similar nature is a great way to increase your average order value because customers are likely to be looking for similar things.

You can check out our blog post: Product Bundling: What You Should Know About It. This way, you can check if product bundling might be a good fit for your business strategies.

Another pricing strategy you can apply to your ecommerce business is the Target Rate of Return pricing. Let’s continue what it is and how it can help.

One factor to consider when setting the pricing of a product is the target rate of return. Prices are flexible and will vary during the course of your company’s existence.

However, the initial price you decide should be supported by facts and based on wise judgments. Finding out how much it costs to run your business is one of the simplest ways to calculate the beginning pricing.

One advantage of adopting target return is that it encourages you to consider your company’s profitability first. For instance, if your sales don’t exactly meet your expectations, you’ll know that you need to change your rates in order to meet your goal.

We strongly suggest you check out this blog: Target Rate of Return Pricing: A Strategy Used by Experts to learn more about the topic. Also, you can see how the target rate of return is calculated and the benefits that you can get from it.

Do you have other pricing strategies that you find advantageous? Please share your thoughts and experiences. This would make us very happy.

See you next time!