At the time of starting your e-commerce business, you might have high dreams with respect to the sales and the growth. In order to achieve the return on investment and growth, the pricing of the products would play a pivotal role. Pricing strategy is a very sensitive affair, if you are not cautiously handling the pricing strategy, you can easily lose the competitiveness in the market. For all the businesses which are looking forward to grow exponentially, you need the right pricing strategy. This blog will help you assess the pricing strategy and effectively implement them for a better growth dynamics. Most stores adopt wrong pricing strategy, you need to understand that you are not one of them. Take a look at five common mistakes which you should avoid at the time of strategizing the price for better growth.
Wrong Assessment of the Unit Cost
Most of the e-Commerce sellers have wrong notions and they act wrongly with respect to the product cost. They feel that the price of the product is at the value which they have paid to acquire them. But such is not the case, the price at which you acquire the product from the supplier is entirely different than the price at which you intend to sell. You will have to understand that in the price, salaries, marketing and advertising. When all these expenses are included in the price, it will inflate the price. The e-Commerce store owners have to understand that if they want to get the minimum operation cost, they cannot grow, therefore, they need to fix the prices in such a manner where they can earn the profit properly for facilitating better business growth
When you are running an e-Commerce store, you need to understand that this realm is proactive. The only constant in an e-Commerce industry is the change. You need to keep changing the prices every now and then to entice the customers. If you are keeping the same prices throughout the year, you will not witness a good traffic at your store. On the contrary, if you are changing the prices during specific season, it can instantly affect the traffic at your store. During the season sale, you don’t have to indulge in proactive marketing and promotion, this might save additional expense of yours, during such favorable times you can reduce the advertisement and marketing expenses which you might have incurred had there been no effective customers to look for the product. This way when you make your price dynamic, it will certain harbor positive results.
Being thoughtful at the time of fixing the prices would always give you better competitive spirit. As you know that online market is highly disruptive in nature. When you are catering to such customers who are ready to switch brands for just few cents, you have to be cautious. You can instantly increase the profit margin with those products which are sought more over the online platform. The best deals are always running over the online platform, you have to make competitor analysis and find out the competitiveness in the market and accordingly you can fix the price. You can polish those products by resorting to effective marketing and thereby, you can easily increase the prospect of the response with respect to such products and increase the return on investment.
Don’t Take Yourself Out of the Market
You have to deploy price intelligence mechanism which would understand the market trends, analyze the competitor’s price and subsequently work upon the pricing of the goods based on the findings. You can cleverly play with the prices when you know the competitors pricing moves, decision and strategies. But you cannot devote your entire time analyzing and intercepting the competitor’s price. Thanks to the advancement in technology that you have software which can help you go through million stores, analyze their prices and suggest you the best bidding which you can use for the product. This way you can easily get the benefit and fix the right prices which can make your store competitive.
At the time of competitor analysis, you might come across a wider gamut of data which can easily misguide you. So to avoid such a situation, as a store owner, you will have to refine the data and take those insights which can help you fix the prices. You have to focus on the right competitor in the market and accordingly you can base the prices. There would be billions of stores with different product base, you will have to pick the relevant ones which can help you influence your price. Find out how they have used the marketing and sales promotion and accordingly you should plan out your strategy. This can help you to avoid distractions and focus on the goals which can help you turn competitive in the market.