- by eSellerHub
While selling on online marketplaces, your goal is to generate as many sales as possible, make profit, get positive reviews and provide optimal customer service to your customers. With the increasing number of sellers and products in the online retail space, there are high chances of getting buried. Pricing product competitively is one of the biggest challenges that most successful online retailers and brands have to face. It is difficult to succeed without having a thorough understanding of marketplace pricing strategies in order to be profitable.
Why Pricing Strategies are Important?
- Pricing is a key-driver in the decision-making process.
- It helps to know what your target market will pay for your product or service.
- Shows you how sensitive your customers are when there are changes in price.
Pricing is everything – no advertising, convenient shipping options, product descriptions, images will capture the attention and land the sale if pricing is not perfect. To ensure you’re getting the most out of every opportunity, check out some of the pricing strategies which you can use on all the marketplaces.
Don’t be the cheapest seller
It’s the myth that, if you offer the lowest price, people will be willing to buy your product. If you slash your price often enough, buyers may consider your product as a cheap quality instead of competitively affordable and it will quickly get you in race to the bottom. Additionally, you will quickly erode your margins to the point where your profitable product will barely make you any money. If that is the situation, consider finding the better source or adjust your product offering.
On a lighter note, if you price your product 1.5% more expensive than the lowest seller, you are inexpensive enough to be competitive. For instance Ryan Grant one of the FBA seller use this pricing strategy for his most of the inventory and this helped him to win Buy Box and maximize the value he received from every sale.
Monitor your competitors
Today, millions of retailers are selling online on various marketplaces and hence, searching for a single product can provide you with tons of more results and if your product is not in the top results, it is less likely to be seen. To keep your pricing strategies much more focused and efficient, you need to keep tabs on your competitors – their pricing and how they modify it. Prefer doing competitive data analytics with a repricing software that can offer you deep insights on how can your pricing stack up/down at every crucial hour. If you monitor your competitor’s price, you can make calculated decisions and offer competitive prices on your products, without being dragged into pricing wars. You can also use advanced pricing algorithms, statistical and predictive analytics capabilities to enhance your strategic insights and decision-making.
Know your USP (Unique Selling Proposition)
Having a great product or the best content is probably not enough to make difference in your business – it’s actually just an admission in the marketplace. Having the USP can make your business stand out and helps you to earn a special place in the mind of your potential customer and ofcourse can be considered as a crucial pricing strategy. Pinpointing your USP requires some hard soul-searching and creativity and so you must look for some other brands on how they are using USP’s to take their advantage and carefully analyze their ads and marketing messages. Every brand need to tackle this situation to determine their USP and target market.
For online retailers, a unique factor can be customer service, free shipping or flexible return policy. For instance: Etsy has taken unique strategy – It offers paid premium services such as direct checkout, shipping labels and promoted listings. These services are specifically targeted towards the platform’s premium sellers.
Leverage Deals and Discounts:
Providing discounts on your products is one of the powerful weapons of your pricing strategies and conversion arsenal. Product owners must use this strategy wisely by retargeting with banners to lure your shoppers back to your products. Depending on the platform, you might have the opportunity to take part in free shipping, BOGO deals, giveaways etc. The market-place which doesn’t have such deals, you can offer discounted price on your own by modifying your sales price from time to time. The best way to offer discount is percentage based discounts.
To be Precise,
Pricing your item competitively is the best way to gain profits. With the growing number of online sellers, competition has never been so intense. You need to be proactive and use a lot of automation tools, and thus build a competitive pricing strategy for each marketplace that will ultimately get you more eyeballs and sales than ever.