Almost every entrepreneur has been stuck with the question of, “how will I price my products?” If you want your e-commerce to be successful, you’ll need to have a good pricing strategy, which is essential for a successful online business.
As a matter of fact, it’ll help you understand the pricing point of your products which can then, maximize the profits of your products sales or services.
What is an Ecommerce Pricing Strategy?
A pricing strategy is a method that a company uses to price the products or services they offer. It is a marketing tool, to improve the conversion rate of the optimization in an efficient way is by applying different pricing approaches. In this way, your online business will be more sustainable, efficient, and profitable in a longer term.
Base your pricing on any kind of pricing strategies, because if you don’t, you might set it for a price that either too high or too low.
Why is Pricing Important?
The optimization of pricing will highly impact your business’ profit, also it may reflect you and everything that you do as an online business.
The main reason why pricing strategy is important, it’s because it is the main deciding factors of online shoppers who want to buy something on online shops.
According to PWC research, these the main reasons why shoppers visit an e-commerce website:
- 41% looks for coupons
- 23% will participate in different kind of promotions, and
- 61% often compares the pricing of other products.
As an illustration, people will first be looking at good prices. If they notice a coupon, they will immediately go to that website.
And second, there is a high possibility that a customer didn’t go to that website for the promotion, but to compare the prices. An average shopper will most likely visit at least 3 shops before making any kind of purchase, also 86% of the first time online shoppers say, it’s convenient to see and compare the products prices of different online sellers.
An Example of Pricing Strategy for Ecommerce
Thinking of a good pricing strategy for your ecommerce pricing is a good idea if you want a successful online business.
Here is a good pricing strategy for your e-commerce business:
This is a pricing method that a fixed quantity or the total cost percentage is added to the product’s cost to determine the selling price.
This is also known to be one of the most common ways of setting a price. Here is a simple logic: after you calculate the costs of your company’s product, apply a profit margin that you want to achieve.
The advantage of this strategy is its simplicity. It will allow you to store to set a price, and without a market research or in-depth customer.
This is just one of the best examples of a pricing strategy that you can use to help you price your products.
This may seem intimidating for those who are new to the concept, but once you consider the right factors, you’ll be making a great pricing decision for your products.