Pricing is the most important aspect for both customers and brands. An effective pricing strategy can either make your business or wreck it. Thus, using the right pricing strategy is essential for businesses. But not every business can figure out the perfect pricing strategy in the first go. It requires a lot of experiments and testing.
Here are a few eCommerce pricing strategies that you can use to enhance your business.
Test your pricing strategy
You cannot fix your prices randomly. There are various elements lay in pricing that are specific for customers, products, and your company. Thus, it takes time to figure out the perfect strategy. One way to find out your pricing strategies is to test them. Try by making a significant change every time to gain clear results and learn from them.
Price sorting order
When customers choose a product category, they make it easy for retailers to choose the order in which product prices are displayed. The majority of people choose the price category as low to high. But as we know, it increases the average order value but decreases the revenue. Whereas in some cases, such as property listing and gadgets, people prefer prices high to low, which can also work well for businesses.
If customers feel they are getting a good deal after discounts, they are more likely to extend their actual budget. Therefore, offering discounts can have a positive impact on your business. The best way to show discounts is to display the amount rather than percentages. Offering the amount is easier than percentages, for example, 250$ off sounds better than 25% off.
Loss-leader pricing means selling your products at low prices to tempt the customers to buy the expensive products. The cost of the less makes up by purchasing the expensive item that is essential to make that product work. For example, an extra camera lens and camera, or an apple pencil and iPad. These items can be purchased later and or at the same time.
Loss-leader pricing is used to increase the average order value by making customers buy extra products in addition to the less-priced product, as they feel like they are getting a pretty good deal.
Price skimming refers to the term where product prices are reduced after a significant amount of time. They are popular in technical product categories; as new versions are released every year. For example, DVD players were popular 10 years ago, but now we can watch every movie on smartphones. Thus, the old products are less desired.
Even though smartphones are very popular nowadays, their better versions are frequently released, and it decreases the value of old models. Also, seasonal decorations and seasonal garments are more likely to be on sale after the season is gone.
You need to pay attention to a lot of factors for implementing the correct pricing strategy for your eCommerce business. A well-calculated pricing strategy will not only improve your revenue but also improve your conversion rate.
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