Every retailer faces this question that how to price a product accurately. A good strategy is compulsorily for the success of your e-commerce business. It provide you the knowledge to understand the paint of pricing at which the profit of the business maximize and increase the sales.
Consideration of factors
There are number of factors which considered before deciding a pricing policy by the retailer. Some of these are distribution cost, customer demand and market competition. You will prove best pricing strategies that help you to set the price of your product.
Pricing strategies for e-commerce business
Price strategy is the method of setting the price of the product by a retailer or a business professional. It is great marketing tool and use to enhance the revenue of the business. With the use of right pricing policy your product become more sale able which make the business more efficient, increase profitability and sustainable in the long run.
Optimization of price
It has a strong impact on your profit and this is a world that operates with value. A good selection of the pricing method and use of price comparison technique is a reflection of your business.
It is a strategy based on market conditions or market competition. It means that you make comparison with the prices of a similar item offering in the market. This pricing strategy is also known as competition-based pricing.
How to use Market-oriented pricing
To set you price with the use of this pricing technique you need to compare your price with the price of your competitor. It is necessary to use price tracking tool that will give you details about you competitor’s prices.
With this tool you know which price is suitable for you it is a chance that you have to set your price too low or higher to see the profitability and competitiveness of the business.
It is important to know that what the competitor is offering and at what price.
There are two pricing techniques
- Price oriented
- Value oriented
It is pricing technique in which a fix percentage or quantity of the total cost add in the cost of the item/product to calculate selling price. It is very easy and intuitive way of setting price of a product. You calculate the cost of your product add profit margin and get selling price. It is the simplest method of calculating price of your product.
Features of cost-base pricing
In this pricing technique data is required about the cost of production, shipping cost and promotion expense. To achieve the right selling price it is compulsory for you that you add all the costs related to this product.
It provide price according to the estimated and perceived value of the consumer. This strategy focuses on the customer group before determining the selling price of a product.
How it works?
You take great advantage from this strategy if you have knowledge of your customers and their demand. You can get benefit from e-mail marketing with the use of this strategy.
A best pricing method is that which provide large revenue to the business and enhance sale for this it is compulsorily to set a suitable selling price.