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As an e-commerce services provider, you want your products to sell like hotcakes. However, setting your prices to the lowest possible isn’t always going to work.
While 87% of U.S. consumers state price as one of the determining factors when making an online purchase, this doesn’t mean you always have to price competitively to turn a profit.
Just look at Apple as an example – rarely will you find a product from their brand set below $1,000. Yet, you still find consumers from all walks of life lining up to buy the latest iPad, iPhone, or MacBook.
Choosing product pricing that boosts your ROI
When it comes time to set the rates for your own products, you have to think of multiple factors. This includes your target customers, their budget, the value of your products, and your financial goals as a company.
Ideally, you want prices your customers are willing to pay and that turns a healthy profit.
Now, there are two models most e-commerce businesses use:
With competitive-based pricing, you’re solely basing your prices on the rates your competitors are selling at. The issue with this model is that you’re constantly in a race to the bottom.
Eventually, you’re going to either get out-done by competition or fall into debt (sometimes both).
This is why at Gray Group International, we recommend the value-based pricing model.
Determining the value of your products and pricing accordingly
We’re all about helping e-commerce businesses succeed. But in order to do so, they need to consistently grow and expand. You can’t do this when you’re consistently competing to become the bottom dollar e-commerce service.
Instead, we analyze your products to determine their value. We do this by identifying how your target customers perceive the products you’re selling and how much they’re willing to pay for them.
If your products are high-value, then you can get away with charging more for them.
This takes careful analysis of your market and customers. We’ll create customer profiles detailing who they are, what they desire, and how important price is to them.
Then from here, we can determine the best product pricing to use for each of your items.
One thing to keep in mind is that prices are dynamic. So it’s important for your e-commerce business to be flexible.
During certain seasons your prices may have to rise or fall to maintain consistent sales and cash flow.
We find that there are three key reasons why customers visit e-commerce shops:
By analyzing consumer behaviors, we can help you convert more visitors by making the right offers at the right time.
Setting the best prices for your e-commerce products
Price selection can be difficult, especially if you haven’t done the research. Allow us to help your e-commerce business maximize sales.
Our experts will dive into your business, thoroughly research your industry, and determine what’s the best prices for both you and your customers.
Contact us today to schedule an appointment for a free consultation!
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