With highly competitive pricing tools, winning pricing strategy in e-commerce is extremely important.
Large online retailers like Amazon, e-bay, allegro.pl, merlin.pl have an advantage in competitive pricing, as they can set the price low enough to run smaller retailers out of business. But there are other ways to compete – and it all starts with developing an ecommerce pricing strategy.
1. You need to know your sales margin for all your products, group of products to be able to predict the income and promotions level
2. Your Unique Selling Proposition – it is your competitive advantage – the thing that you are an expert or only you are selling a particular product ( like a product producer ). It can be a free delivery for the order of over $50. It can be also some charity that $1 spent on the order will be transfer to any charity fund.
3. Promotions – offers – many aspects and types of offers you can practice here. But you need to always think about your profit. There are very popular practices like “Buy 3 and get 50% for next” , “Buy 2 and 3 for free”, “Purchase in the next hour and receive 20% off!”
They can help you attract new customers but it can damage some brands in your online store.
4. product segmentation – you need to know your best selling product, low selling with great profit and most important products for you that are in line with your overall business strategy, high selling products. You need to compare them to your competition prices. Some producers will suggest prices and you cannot give any discounts without their approval. It can be very tricky if you have a full stock of their products. You also need to group products into similar ones and comparable by usage, consumer type, etc. to better prepare your pricing.
5. customer segmentation – there are different types of customer segmentations: statistical, style related and many others depending on your business type. There are customers that are looking only for sales, promotions. There are customers that are looking for particular product. In both cases you can use a shop application to propose them up-selling, cross-selling or similar products. Most shopping platforms have such feature.
6. your product offer should be interesting and diversified. You need to monitor your sales and trends. Google Analytics will help in it as well as other e-commerce platform statistics, your shop statistics. You know that there are some seasonal ups and downs for some products and services. It is obvious that in majority of online shops 80% of products have to be in your offer, 10% are stars that you sell them very well, 10% are fashion related and fast moving as well. Simply you need to monitor your clients expectations and popularity of products.
We can help in analyzing all these aspects.