How to boost your online sales with these 3 pricing strategies
What is the biggest challenge for online retailers?
Within the current marketplace landscape, online shoppers remain focused on the value, turning pricing into retailers' most acute business concern. According to a recent study, about 60% of retailers reported keeping up with the competitor prices as the #1 operational pressure.
Even with the best products on the list and strong promotion campaigns, you still need to have an effective pricing strategy in place and make sure shoppers will choose your listing over competitors (unless you are among big players who do not compete on price because of unique products, superior customer service, etc.). If you are not part of the latter group, the question is: Where should you start?
Prices have been mostly dynamic until the end of the XIX century. Buyers have negotiated with sellers to find the best deal. It could vary based on demand, stock, or person who was purchasing the item. However, this system was not efficient for shop owners, making it intricate and time-consuming to track the prices as businesses tend to grow during the Industrial Revolution. Also, it was creating long waiting lines forcing consumer resentment if someone ahead got a better offer for the same product. In the 1870th, the first price tag was invented, which considerably scaled up the assortment.
For the majority of online retailers, initial prices are based on a combination of percentage markup on cost, competitors’ pricing, and their own judgment. With the latest enhancements in e-commerce technology, it is much easier now to approach the area of balancing your list prices. The exact term for this concept is dynamic pricing, the strategy to set flexible prices for products or services based on current market demands. Your goal here is to apply the optimal price for a particular item automatically based on the different factors ( the competitors’ rates, market demand, etc.) By “optimal,” you should consider the price that allows you to sell the product with the highest possible profit from the sale. Your pricing software must be complete and intelligent to let you easily compile all data to adjust the prices and availability of your competitors, margins, and perceived product value. Moreover, it needs to be able to translate this data into relevant and comprehensive information and use it for automated forecasts.
What are the strategies to grow your sales on marketplaces?
There are a few dynamic pricing techniques that will strengthen your product position and keep you ahead of other sellers.
1. Competitor monitoring
On the one hand, marketplaces present an unmissable opportunity for e-commerce sellers to grow their business. On the other hand, they also empower online shoppers by offering endless results for a single item. Within this scenario, your listing has to be on top to be seen and have a chance to end up in a shopping cart. To stay ahead of pricing trends, you will need competitive data analytics that is easy to understand at a glance. Hence, visualization dashboards and tools for benchmarking are paramount. They will allow you to generate comprehensive reports and dive into your ranks next to the competitor’s (based on SKU- and ASIN-level insights).
2. Product bundling opportunities
Product bundles are offers made up of multiple products. They might be of interest to certain customer groups, cover a specific product area, or offer something completely new. Yet, do you know what else makes product bundles so powerful? Single-SKU offerings are a valid practice for competitive pricing and a great technique to differentiate from the competitors. By grouping products into competitively-priced packages, you will stimulate buyers to stretch their wallets. Think of the customers considering only one product to purchase. However, once they see your promotion, there are pretty good chances you will land a much bigger scale. Bottom line: product bundles require minimal efforts, refresh your purchase options, bring in more sales, while your customers appreciate the extra savings and added value.
3. Centralized multi-channel management
If you have multiple accounts and depend on channel interfaces in silos, it is extremely challenging to shape your pricing strategy. How will you know when your Bol.com price gets higher than what you have listed on Amazon or eBay? A centralized view on a single, streamlined platform will prevent data gaps, price discrepancies, analysis delays, and other issues turning into big problems. Systematically synthesize your information and let the software analyze the rest.
With more sellers and buyers converging to marketplaces, it is hard to underestimate the competitive rates. Pricing concerns turned out to be the most significant operational pressures for online retailers. However, with competitor monitoring, product bundling opportunities, and centralized multi-channel management, you can manage adequately priced items for each marketplace without much hassle. Read more about repricing your products based on competitor prices easily. Set variable price rules for a list or just one product, and adjust the settings in any way you like. Also, you can book a demo to see how these features work in a real environment. Do not let prices compromise your sales!