Setting the prices of goods in an online shop is an important point of your business. How much a product price should be in order for sales to generate the most profit is not so obvious. Many factors influence the price of a commodity. Learn the basic principles of merchandise pricing and increase your chances of successful sales with the Dynamic Pricing module.
According to research conducted for the Economic Information Bureau ERIF in 2018, the customer who makes a purchase decision primarily considers the price (51 percent). The latest findings from KPMG's consumer research highlight that in an era of social isolation and an uncertain future, an important element of e-commerce is the need for customer personalisation.
To build a strong and recognisable brand, you should take care of the right pricing strategy and long-term customer relationship.
What should you keep in mind when pricing your products? Consider several factors:
To sell goods, you must incur certain costs associated with purchasing products from the manufacturer or manufacturing them. Estimate these costs, your assumed margin and other operating costs.
The price of goods should reflect not only the value of the goods, but also the needs of the customer. Therefore, answer the question of who your customer is and what he expects. Does he appreciate promotions or prestige more? Does he prefer expensive novelties or discounted classics?
Unfortunately, you probably already have competitors in your industry. Find out at what price they are selling goods. It is important to monitor their prices and react quickly to changes. All it takes is a big price cut from your competitor for you to see sales drop in your shop.
Customers do not only follow the price. What matters is the relationship between price and customer benefit and the value of the goods in question. It makes sense to price products according to their value to customers and to differentiate the price of goods according to the target group. A customer who buys in the marketplace is a customer who is primarily focused on fast delivery and low price. Remember that sales in the marketplace are short-term sales with no chance of a longer-term customer relationship. To build a successful shop, it is worth having a loyal customer base.
There are many aspects that you should consider when you are pricing your merchandise. Remember that the price should be beneficial to both the seller and the customer. An effective pricing strategy is based on an analysis of your target customer's needs and a competitive analysis. To determine the optimal pricing policy, use the module from IdoSell - Dynamic Pricing.
Dynamic Pricing is for you if:
Take advantage of the fact that your products are unique in the market and make sure that the customer buys them directly from you in the shop. We recommend using the strategy "in the marketplace more expensive", while advertising your goods intensively on Google through the service Google Ads from IdoSell. Thanks to this pricing policy, you have the chance to attract customers directly to your shop and build a long-term relationship with them.
If you sell popular goods, it most likely means that you have a lot of competition. If you base your sales on a marketplace, you've probably felt at times that you're in a tough position as a seller. Not only do commission fees continue to rise, but the requirements that are imposed on the seller are also increasing.
To exist in the marketplace, your offer should be attractively priced, which means preferably the cheapest. Price is basically the only bargaining element in the eyes of potential customers.
If you sell in the marketplace, you are probably concentrating on short-term sales and missing the opportunity to build a long-term relationship with your customer. What's more, any attempts to establish such a relationship are severely punished by the marketplace, even blocking the seller's account. This sales model does not give you the space to build an independent shop brand and reduces the merchant to a mere nameless supplier of goods to the marketplace customer.
Tip! If a customer goes to your shop after entering an advertisement, make sure that the customer experience is the best it can be and that the customer will come back to you for the next purchase.
With Dynamic Pricing: