How To Keep Your Product Pricing Competitive – Always
Successful ecommerce stores need competitive prices that attract buyers. While you don’t want to overprice your items, you also want to avoid underpricing them. If you underprice, then you won’t generate enough revenue to grow your business.
Follow these six pricing strategies to keep your ecommerce webstore pricing competitive at all times so you can build a successful ecommerce business.
Know Your Costs
Even the smallest ecommerce store has overhead to think about. Knowing how much it costs to run your business will help you determine your ecommerce webstore pricing. As you start to add the costs, you may discover that you spend more than you thought. Common costs include:
- Manufacturing or buying stock from wholesalers;
- Marketing and advertising;
- Paying employees;
- Rent for your warehouse space.
Keep Your Revenue Goals in Mind
You also need to keep your revenue goals in mind. After all, you started your ecommerce company to earn money. Many business owners decide that they a pricing strategy that will give them at least 30% ROI.
If 30% sounds high, remember that you don’t get to pocket 100% of your revenues. You need to build a cash reserve, fund strategic growth, and prepare for unexpected changes in the market.
A responsive pricing system helps ensure that your company stays busy. If you find that you can’t keep up with orders, then you can raise your prices slightly. Raising prices will likely reduce your number of orders, which lets you keep up with demand.
If your business doesn’t have enough orders coming in, then you should lower your prices to attract more customers. This pricing strategy will create a constant flow of customers, which is what you need to grow your business.
Offer Real Value
Some consumers only pay attention to prices when they make shopping decisions. Most people, however, understand the importance of value.
Instead of lowering your prices, find ways to increase the value that customers get from your goods and services. For instance, you may offer free shipping and handling, respond quickly to customer messages, and create online content that helps shoppers use the items that they buy from you.
Track Your Competitors’ Prices
Shoppers rarely know the true value of the products they want to buy. They determine whether prices are fair by comparing offers from several companies. Online shopping makes it easier than ever for consumers to compare offers from multiple sellers.
Tracking your competitors’ pricing history will give you insight into what shoppers perceive. If many of your competitors sell an item at a price that’s significantly lower than your store’s price, then you will lose customers. As long as you stay within a reasonable margin of your competitors’ prices, though, your customers will feel like they’re spending a fair amount of money.
Automate Your Listings with Dynamic Repricer Software
Finding the right prices for your products can take a lot of time and effort. Dynamic repricer software can automate your listings so you get to spend more time growing your business.
Dynamic repricer software constantly monitors the prices your competitors charge for products. When they change their prices, the software automatically performs a pricing comparison and lowers your prices to attract more buyers.
The best software gives you control over your dynamic repricing. After all, you don’t want your prices to fall so low that you don’t earn a profit. Instead, you want to set parameters that keeps your ecommerce company competitive while meeting your revenue goals.
Competitive pricing can benefit consumers and businesses. As long as you use the right tools and strategies, you can turn competitive pricing into a boon for your store.
Jazva is an all-in-one inventory management platform built for high-volume multi-channel online sellers. The software lets you automate and streamline virtually the entire eCommerce process. Jazva provides the most comprehensive array of functionalities necessary to succeed in multi-channel ecommerce, including products and listings sync, advanced reporting, vendor and invoice management, warehousing, shipping, order fulfillment and automation.