ECommerce store product pricing depends on what the product means to the people, the cost in making the product and the price offered by the competitors on the same. Analysing the prices regularly and updating them tactfully means a lot to remain a cynosure in the market and to attain high estore conversions. What are the factors to be considered in the pricing strategy of estores? Let’s talk in detail.
- Keep in mind that there are your competitors popping up very often. A few users who may add products to your estore cart may abandon and choose the competitor offering a lower price. Never mind; it’s important to win loyal customers for long term rather than going to a low level to win anyone attracted to the low prices. Pay attention to your existing customers, address their needs/problems, offer them reliable solutions via your products and services; they’re sure to choose you even you give a bit of high prices because they know you for long and trust you. Updating product prices to the higher end, easily works out here.
- Competitor prices is a crucial element in your pricing strategy. There are a lot of tools in the market offering you solutions to get information on prices marked by other sellers. Once you get an idea of the product features projected by others, you can pick up a unique feature to mention and make a slight increase in the price. Striking the perfect balance between the number of pieces sold for the item and updating product prices to higher ends (say a 5-10% increase) is challenging but possible with intelligent strategies.
Supplier costs, marketing costs, logistics, staffing, product make costs and any other related expenses make up a product’s selling price. Go for more pieces of raw materials so they cost lower. Negotiation is always an option; do it at your best; keep in mind, your market status, relationship with the supplier, age of your company, frequency of raw material buy, and related factors when you do.
- When you keep the prices unchanging even during the market change, you are seen suspicious in a customer eye. Every customers doubts both the ends of a price: too low and too high. Competitive knowledge in tweaking prices alone can lead to that price which most buyers would be happy to give. Automatic price tracking software tools are available which analyse prices on product pages of competitors and keep offering you change decisions whenever appropriate; don’t miss to take a look at them.
Instead of lowering prices to attract customers, start offering customers more features than your competitor does. When you are more personalised, innovative, skilled and unique in features, customers don’t doubt your high price. Have a unique selling point, mention it in your product pages and sell by it. May be you can offer more warranty and maintenance services along with the high prices. Be creative.
In rare cases where there’s no or very less others offering the same product as you do, go for premium pricing. It’s good as long as you have less number of competitors in the market.
- Once you become famous for your brand, once you’ve stood for long in your stance, once you’ve build a huge customer base and once you’ve gained a popularity consistently over years together, updating product prices by going for premium pricing yields a lot to estore conversions.
Is your target market a young aged crowd or other specific audiences? Then premium pricing definitely works. Certain groups of people always are fine to pay up high because they’re in real want of the item. Play smartly.
Penetration pricing is when you start up a new service, say television channel provider, you offer low prices, win subscriptions and then raise your prices.
Skimming pricing is when you keep at a high price at the launch and gradually reduce the price. This works well when your brand is an established one in such a way that the users are ready to pay you for any item you offer. Once your existing customers have bought, you can lower the price to attract new ones.
We believe you now have a fair knowledge on what factors go into deciding the price of an item in any eCommerce platform and how it’s extremely important to strike a balance between all the involved factors in order to arrive at the best price for sales. Should you have questions or wish to talk to our experts for specific scenarios in your business pool or would use our quality services for estores, contact us now.