Profitable ECommerce Retail Pricing Strategies: Seven Surefire Ways To Nail Your Pricing Model

Do you know 78% of e-commerce stores invest in Price Benchmarking? Pitching your eCommerce products online at the right price can dramatically impact your eCommerce store’s success. Yes, a competitive retail pricing strategy plays a vital role in turning visitors to your customers and encourage their “click add to cart” action, which will eventually result in increased online storefront profitability.

Setting the right product pricing for a new product or even an existing product line, however, is not certainly simple. Going with low price tags may help you to stay competitive but you have to compromise on profits whereas by setting higher prices for products, you will be at risk of losing many budget-conscious customers. The many factors that influence the pricing decision of every eCommerce retailer primarily include:

Costs involved in production, business set-up and marketing campaigns.

Investments in outsourcing a born-digital certified eCommerce Development Company USA to launch a responsive eCommerce store offering an enamoring customer experience.

Negotiating margins and marketplace commissions

Attractive order-size discounts, competitive discounts, fast payment discounts, annual volume bonus, and promotions allowance.

Government taxes like GST or Sale-tax

Charges like shipping, handling and packaging

No matter how much experience you have as an ecommerce entrepreneur, nailing your pricing for product offerings can make or break your online retail business. Landing on the “right” price for your products definitely demands thorough thinking. Maybe that’s why many eCommerce retailers in USA consider the eCommerce Pricing Strategies as a balancing act to drive maximum engagement and accelerate business growth online without losing market share.

Ecommerce Development Company: Profitable ECommerce Pricing Strategies Every Retailer Swear By

To win the battle in the highly competitive marketplace, there are many eCommerce pricing strategies that can be taken into consideration to make your eCommerce store a huge success. Finding the best pricing model in place will bring your customers accelerated value for money while maximizing your store’s profit. Let’s delve deeper to explore top pricing models and strategies dominating almost every ecommerce competitor:

Loss Leader: This is a pricing strategy that ecommerce companies use as an easy thumb of rule. Essentially, it is an aggressive pricing strategy which involves selling products at a below cost to attract maximum buyers and lure customers away from competitors.

Cost-Based Pricing: Many online retailers prefer to benchmark their ecommerce pricing decisions using this model which involves setting prices based on the product cost. It is also referred as markup pricing and reflects solely at the unit cost and ignores the prices set by competitors. Businesses who aiming to maximize the profits without scaring off the customers, use this model.

Competitive Pricing: As the name suggests, it is a result-oriented pricing strategy in which a retailer adds a prefixed profit margin to the total product price in order to regulate market competition.

Penetration Pricing: It involves attracting maximum potential customers by offering them sales, coupons, rebates, seasonal pricing, and other related markdowns. The obvious advantages of this type of discount pricing strategy are increased foot traffic, offloading unsold inventory, higher adoption, and discouragement of competition.

Product Bundle Pricing: As the name of this pricing strategy explains itself, the multiple pricing involves selling more than one product for a single price, which eventually leads to larger volume purchases.

Choose your right fit to stay competitive and transform your ecommerce operations while optimizing your online storefront profitability with multi-million dollar annual revenue.

Ecommerce Software Development Company: Know your pricing goals before making pricing decision for your Online Store?

Running a profitable online retail store without a specific pricing objective often feels like an endless black hole. Setting up goals for your ecommerce store cost is quite imperative to put your business in a profitable position. In case you don’t have any goal in mind, discussed below are some most common ecommerce pricing objectives you can consider to begin with:

Always do Pricing for Profit with a significant consideration towards whether you want accelerating profitability in the long-run or short-run.

Be prepared to accept short-term failures. Fast track your revenues and sales by setting a product’s price initially for survival covering essential operating costs.

Concentrate on increasing overall market share with your core focus on maximize new potential customers and retaining existing audience. To do so, retailers often leverage a penetration strategy to minimize price points of their product offerings which eventually attract price-conscious buyers, resulting in an exponential growth in market share.

Before making any decision for your product’s pricing, make sure you have carefully evaluated the pricing goals on the parameters discussed above to achieve maximum return on investments.

Retail Ecommerce Software Development: How to choose a right pricing strategy?

There are endless options to find the pricing for your online store, but the biggest concern is how to pick the best formula that is certainly not a low-hanging fruit and will not undervalues your products while still holding a competitive edge.

Here are quick ways through which any online retailer can figure out if the opted pricing model is creating difference or not:

What products you are selling and how much manufacturing costs involved?

Who are potential customers, what’s their behaviour and ideal customer profile (ICP) and how much their spending capacity?

How much profit margins can be earned?

Who are target competitors and how they priced their products offerings?

What are the prevailing market conditions?

How much fixed and variable business costs you need to cover?

The right pricing model always rules your ecommerce store growth — so don’t forget to harness that power to create a huge difference among your target audience.

The Wrap up

Always remember value is KING in eCommerce. Be a game-changer in the online retail business environment by proactively taking a holistic approach to ecommerce pricing strategies while keeping in mind your business goals, long-term growth plan, and product-specific sales targets.