There are far too many factors that could make or break an E-Commerce Pricing Strategies. Technical elements concerning your website’s performance and usability are among the first that may come to mind. On the other hand factors regarding order fulfillment as well as after-sales support can play an important role in your e-Commerce pricing Strategies success.
However, only expert online entrepreneurs understand how important pricing is for any business. Your products’ pricing is very crucial because it has a direct effect on your revenue.
In some cases, pricing is also indicative of quality and value for money – two things that most customers are too conscious about when trying to make a purchase decision.
As the e-commerce industry becomes more cluttered. It’s important to differentiate your business apart from the rest of the competition by seizing every opportunity possible. By looking at certain e-commerce pricing strategies. You can get more profit out of every sale and entice more customers to shop on your website.
1. Raise your prices so shoppers think less best e-commerce pricing strategies
When aiming to get more sales, it’s sometimes easier to think that lowering the prices will encourage more customers to buy, which is true up to some extent.
However, when your products are priced low enough that it looks too good to be true, people tend to think and ask why it’s too affordable. When you see a brand new phone being sold at 30 to 40 percent less than the published price, you’d probably think there’s something wrong with the unit being sold.
Raising your product’s prices, on the other hand, easily squashes scepticism on product quality. Just make sure to raise prices just enough for customers to think less.
2. Attract customers with a “loss leader”
One of the oldest tricks in the pricing books, attracting customers by selling “loss leaders” is an effective pricing strategy that works.
In essence, “loss leaders” are products that are sold at a loss to encourage the sale of much more expensive products.
One of the best examples of loss leaders is computer printers. Because printers can be pricey to manufacture, companies impose very thin profit margins on them. They regain profits by making their printers use exclusive branded inks, allowing them to increase profits from repeat purchases that their customers will make.
3. Avoid similarly priced items
When businesses produce similar products and the costs associated with producing these products are almost similar to one another. It’s easy to make the mistake of selling at the same price. However, this makes the buying decision harder for your consumers.
For instance, if there are two services listed on your e-commerce website and they are priced exactly the same. Customers might be confused up to a point where they postpone their purchase.
Based on a study, this confusion can significantly hurt conversion. On the other hand, setting a price difference of even just by a dollar can produce a 31% increase in purchases.
4. Implement value-based e-commerce pricing strategies
Most customers that shop online is aware that the price they pay for isn’t just paying for the product they are buying with discount. They are also paying for the quality of your businesses’ customer service, shipping and logistics, return policies, and after-sales support. As well as the overall online shopping experience.
These factors depend on what kind of product you’re selling. For instance, it would be valuable for customers. If an online store website that sells clothes offers free returns for products that don’t fit their customers well.
Websites that sell device accessories. such as chargers, can offer same-day delivery because this might be valuable to customers who are in desperate need of chargers.
The type of value you add to your products really depends on what you think is important for your customers. At the end of the day, these added value will allow you to increase your pricing, and may even set your brand apart from the competition.
However, applying this pricing technique might alienate consumers that are very keen on how much their purchases cost.
5. Practice price anchoring
When customers shop online, they are subconsciously entering a cycle of decision-making. In every click, every scroll, and every window they close, a decision is constantly being made.
That’s is why it’s important to make it easier for them to make decisions. Because of once their decision cycle is disrupted, there’s a higher chance that they’ll pause and postpone their purchase.
If a customer sees a product beside another one that’s priced basically the same. They usually get confused and their decision-making cycle becomes slower. However, by simply rearranging your products so that lower-priced items appear alongside more expensive ones. You are making it easier for your customers to choose.
People that are price sensitive will most likely choose the cheaper one. While those who are after quality will most likely look at the more expensive one. Whatever they choose, their decision was made based on a price anchor based on other products they saw.
However, it’s best to practice caution as customers are growing more conscious of this technique.
6. Create a cool visual feel for items that are on sale for Ecommerce pricing Strategies
If you think that using a minimalistic design for your website is better for your business just because everyone is doing it, you might want to rethink this and do more research.
In fact, about 84% of online marketing and visual experts believe that using contrasting colours, eye-popping designs, and various text sizes contribute to better performance than their competitors.
Ever since the infancy of marketing and advertising, it’s been proven time and time again that bright colors and larger texts help a lot to emphasize deals and sales promotions. It might be a good idea to continue sticking to this practice.
Nailing your product pricing for better profit margins
Getting the right balance on pricing that works for your business is a process. Even if you’re doing some of the strategies mentioned above. There might be some tactics that you’re still about to implement to get the right formula for your business. Just continue tweaking your pricing policies until you see substantial results.
About the author – Jake Rheude is the Director of Marketing at Red Stag Fulfillment, an e-commerce fulfilment warehouse that was born out of e-commerce. He has years of experience in e-Commerce pricing Strategies and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.