If you’ve ever shopped for anything in your life, you know just how important price plays a role in the decision, especially when you’re torn between two similar products or vendors. On the flip side, as the merchant, you have the power to make that decision easier for your buyers — but only if you follow RepricerExpress’s advice with these solid ecommerce pricing strategies.
Strategy 1: Avoid Getting Seduced by Immediate Gratification
Your goal as an online merchant is to increase your profit margins as much as possible while streamlining your costs, no? And in a world where the landscape shifts more than the weather at the British Open, you’ve got to have patience and think of your long-term plan.
More so, one of the biggest factors you’ve got to keep in mind is what your long-term costs will look like when setting present-day profit margins. While the approximate equation (more revenue than cost), the details are a tad more complex. So, how do you make it work?
Implementing the strategy: Jot down the following figures and add them up.
- How much each item costs from your supplier
- What it costs to ship each batch to you
- How much you’ll have to pay per time period to store your inventory
- What it’ll cost to market and advertise those items for those time periods
- How much salary you pay your staff (and what you need to take home to survive)
- What you pay to host your site
- How much is in your budget to acquire and retain customers
- Anything else you can think of
After that, calculate the figure that works for you for your profit margin (i.e. 10%, 30%, whatever works for you and/or is achievable for your inventory) and work out the difference to arrive at the median price you need to be attaching to the item. This isn’t a final, fixed figure, but rather one that you can work up and down from so you don’t over- or under-value your items.
Strategy 2: Let Supply-and-Demand be One of Your Driving Principles
This can either be a huge boon or a test of patience for you, depending on the temperature of the market. But you really need to listen to what supply-and-demand is telling you, or else you can be left in the dust while your competitors are gobbling up your profits because guess what? Your customers are the ones who actually dictate what each item costs by either buying it or not.
If you’re selling a hot holiday item that really appeals to kids, then go ahead and raise the cost to take advantage of the season. But if you’re dealing with something like generic-brand items that appeal more to spendthrifts and are more readily available, you have to adjust your prices to match that.
Implementing the strategy: Ask yourself the five ‘W’ questions:
- Who are my buyers?
- What am I selling/giving them?
- Where are they looking to get this product?
- When do they need it?
- Why should they choose me?
Once you’ve identified these answers, you’ll be better able to understand the motivation behind their purchases and appropriately adjust your prices to go with the supply-and-demand flow.
Strategy 3: Strip Your Competitors of Any Pricing Advantages
Once you’ve researched exactly how to best appeal to your buyers, the next step is to remove as much advantage as in your competitors’ corners as possible. Hey, if you can leave yourself as the last merchant standing, then it’s a pretty foregone conclusion that consumers will naturally spend with you.
Luckily, the answer to this is ridiculously straightforward: repricing. Aaand, here’s how to make it work for you!
Implementing the strategy: First and foremost, you’ve got to find an app that really suits your personality, style and needs. Out of unbiased obligation, we’ve got to say that there is more than one to choose from. But really, if you’re looking for that unicorn repricer that does everything short of preparing breakfast, then RepricerExpress is it for you.
Look, one of your main goals is to know when your competitors change their prices so you can beat them by enough to lure shoppers over to your side, right? And you don’t want to spend unnecessary time doing that, so you need a program that’ll take care of the boring stuff for you so you can triple your productivity. But to go one step further, keep track of your competitors’ prices over various timespans so you can see their pricing strategies, and compensate for the software’s subjective knowledge by using your own to make those subtle, game-changing decisions.
Once you’ve finished watching that clip of The Simpsons above, it’s time to sign up with RepricerExpress. In less than a minute, you can transform your business from amateur to professional and really give buyers a reason to shop with you. And hey, with a 15-day free trial waiting for you, there’s no reason to not sign up right now!
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