Are you happy with the conversion rates for your checkout process and shopping cart?
Have you thought about a deeper look into how you price your product?
Well, pricing of your product is an essential part of your business. It can make or break your business. However, it’s certainly an effective tool to influence and control demand for your products or services.
The majority of people make purchasing decisions based on price. Therefore, for an Ecommerce store, it is very important to set the right price that is you need a perfect Ecommerce pricing strategy. Simply put, you need to make sure that your products are priced correctly so that you can make profit and retain customers at the same time. Moreover, it also means that pricing of your products will not scare your customers, rather will help get more customers.
Is there any pricing strategy behind how you price your products?
Well, there should be. In today’s highly competitive market, it is really hard to win the online pricing war. Many online giants like Amazon, eBay have an edge with highly competitive pricing tools. So it can sound a daunting task to many online businesses. If you want to compete and stand ahead in the competition, then here are some tips that will help you develop effective Ecommerce pricing strategy that will help increase your sales.
So, let’s start with your competitive online pricing strategy for Ecommerce
What’s your USP?
This is a good starting point when it comes to pricing journey. In today’s highly competitive and customer-centric environment, rather than thinking about the product you are trying to sell online, you need to focus on the value it provides that is your Ecommerce USP. Think from your customer’s point of view. This will help you find expectations from a store and product/service. Think what will make your customer select your product to that of other options. What makes your business, your products/services to stand ahead in the competition?
If you know your USP, you can use it to navigate through the competition. Your USP is the reason that makes your customers choose your company rather than your competitors. You need to highlight your USP. Here are some ideas: free delivery, fast shipping, unique product showcase, more options, payment options, a greater assortment of color/size, charity on every purchase and lots more.
You just need to think outside the box while developing a marketing strategy for your Ecommerce store. Here you also need to give market demand and fashion a thought as well. If you are up to date with amazing Ecommerce trends, then it will help the popularity of SKUs.
Lowest price doesn’t always win: Know your margin
The reality of Ecommerce pricing is that the lowest price is not always the best one. On the contrary, many lose pricing battles just because of too low product pricing. The low price will attract enough customers; however, you may not make a profit. Rather than reducing product prices to a point where you lose money, you need to consider about adjusting product offerings, including more profitable items or finding a better source.
Furthermore, offering too low prices consistently will make your customers expect the lower price always. And not doing this could mean losing those customers over time. Moreover, an unexpectedly low price can negatively influence the trust of potential customers. Certain products are expected to have a certain price range. If they don’t, customers might wonder “if the product is real? Is this store trustworthy?” so rather than focusing on running sales, you need to think about wise pricing.
Sell on Value:
Pricing based on value makes sure that your customers are willing to pay product prices for the value they’re getting. This approach helps create an experience for your customers, that is in line with their expectations and at the same time you need not short-change yourself. For this, you need to focus on customer communication. Exploring what customers value the most from your store? like durability, exceptional customer service, a wide variety of choices, quick response, quality, return policies, shipment options, payment options, comprehensive sizing, etc. will help you strengthen your brand name. This approach also helps build customer relationships and enhances your bottom line in turn. Truly this will help create a win-win scenario for your store and your customers as customers are satisfied with pricing worth the value they are getting and for you, happy customers mean retention, loyalty and referrals and increased sales in turn.
So find little ways to create more value for your customers and you will surely notice a huge difference it makes to your overall Ecommerce business.
Offer a Loss Leader:
If you really intend to entice more customers to your Ecommerce store, then offering loss leader can be an effective strategy. This approach involves selling a product below market value to encourage customers to make more purchases overall. This approach helps increase the total shopping cart value by providing the opportunity to upsell and cross-sell. Though the profit is not immensely remarkable, this approach stimulates customer interest for purchases in future. To minimize loss, you need to select products with low cost-per-acquisition. Simply put, you are sacrificing money on one item to make a profit on other products and boost your overall sales. However, avoid overdoing loss-leading prices as customers will always expect “low priced” items from your store.
Offering incentives can be another effective way to further your E-commerce pricing strategy. Simply put, everyone loves to buy a product that features a low price tag. Truly, lowest price does not always win, but periodic discounting can attract customers. You need to phrase your discounts carefully. Also, make them time bound. Occasional incentives as part of your Ecommerce pricing strategy can help grab attention of your customers. Furthermore, it helps build customer loyalty as they keep coming back to make a purchase. You can offer seasonal pricing, coupons, rebates, buy 2 pay for 1 and many more.
Use B2B Ecommerce Software:
Intelligent pricing is the key to your ultimate business success. In order to price right and stand ahead in competitive market share and sales, you need to keep an eye on your competition. Having an idea about what’s happening in the market at any given time will help you have the edge over competitors. Pricing tools will help you have pricing insights, price distributions and trends, pricing policies as well as how competitors make a distinction from yours.
Know the market demand:
Selling trending stuff is another important aspect in your Ecommerce pricing strategy. Give your customers multiple options so that they can figure out what they want. Diversifying your product offerings in order to sell trending stuff helps improve your profit across an array of offerings and increase revenue in turn.
Test Ecommerce Strategy:
This forms an integral part of your E-commerce pricing strategy. Regularly measuring results and testing your pricing using analytics tools will help find out which strategies work well and bring you the most conversions.
To conclude with, it is essential to understand that one size doesn’t fit all. Developing an Ecommerce business involves a lot of experimentation. Truly pricing is a powerful tool that will make you competitive and successful and hence you need to master this art and get it right. You need to find out the pricing strategy that works most advantageously for your particular business. Rather than focusing purely on driving more traffic to your Ecommerce store, make sure that you optimize your Ecommerce strategy to strengthen your foundation for success.