If you are going to open an e-commerce, without a doubt, one of the most important points, in addition to doing good marketing, is to set the sales price of your products. To do this, you must study and implement a strategy that boosts customer interest and makes them choose your items over those of the competition. As experts in helping companies grow and optimizing their digital channels, in this article we will give you some guidelines so that you can apply the right prices and achieve success more easily.

Some types of strategy.

There are different types of strategies to set the price of products, in this case we are going to divide them into three different strategies: according to market, according to value and according to cost.

• According to the market: product prices are set based on supply and demand. This type of strategy does not take into account any other securities, it is simply based on the market. It is usually applied in sectors in which products can be quickly replaced with new ones, such as retail.

In this type of strategies the prices are set by the market, that is, the price of the product cannot be changed unilaterally, if you raise the price of that product too much you would break the market and you would be left without sales.

It is very important that we know the competition well and the price range of products that are similar to yours.

• According to value: in this strategy you are the one who sets the prices and the benefit you want to obtain based on your product and the added value you offer with it. These types of strategies are based on market value, but the price established can be higher because added value is provided to the product that the competition does not have.

In the value-based strategy you must be very clear about who your customers are and what they are willing to pay for that product or service that differentiates you from the competition.

• According to cost: costs and profit margin must be taken into account. To implement this strategy you must take into account all the costs involved in your product or service, from production to delivery. Don't forget to enter all the costs, otherwise this system will not work. Next, stipulate the profit margin you want to obtain. To complete this step, you can look at the competition to guide you on the prices they have for the same products.

In this strategy, the main thing is not to forget to include any costs and be clear about the benefit we want to obtain.

Factors to correctly determine the price of a product from your online store.

In the following lines, we explain the important points that you should consider to set attractive prices that attract users, but at the same time, allow you to obtain benefits.

• Set an appropriate base price.

If you have just opened your online store, you must set a price that covers the investment margin and, of course, with which you obtain a satisfactory profitability to continue with the business for a long time. You should apply this same rule if you already have an ecommerce and you are not getting the profit you want. You can choose the retail price that, after in-depth analysis, you think is most convenient. But always, no matter how low it is, it must be higher than the cost of production.

Depending on the type of product you sell, you must take into account the retail price. If your products are generic, that is, they have the same characteristics (or even exactly the same) as those sold by competing companies, put them at a lower price than these so that consumers choose you over them. However, if your items present added value, either through quality or exclusivity, you must reflect this in the price to give the product the value it deserves.

• Account with added expenses

It is important that you take into account the resulting expenses when choosing the final price of the products in your store. Sometimes you only need to add a few cents to the base price. But it is advisable that you take them into account to avoid long-term losses and calculate the amount well.

Among these expenses you can find, for example, applications or professionals to help you design your articles, expenses for your online business platform, agencies that help you have a quality website, and advertising expenses.

The best advice we can give you is to make estimates to know what amount to put on each product and how to balance the aforementioned expenses. To do this, it is best to make a calculation of the products you think you will sell in a month, based on the quantity you have available, the advertising you are going to do, etc.

• Review your profit margin from time to time

Profit margin is defined as the amount of money you have left after selling a product. You should not make a mistake with the derived expenses, since the latter are investments that you have already made and will recover with the joint sales of products. Especially if you are starting out or your audience is low-cost, try to attract them with affordable prices, even if your profit margin is lower. In the long run, it will be positive for your company.

Pricing strategies for your online store.

Once the sales price of each product has been set, it is time to start thinking about strategies for your ecommerce. That is, in those marketing tactics that will help you sell your products more easily. Although there are many plays that you can try, in the following lines you will find some of the ones that offer the best results.

1. Variety of prices of similar products

Choose similar items, but put them at a different price. First, calculate what is the intermediate price that you would have to charge and, then, put some products with a higher price and others with a lower price. After several analyses, we have come to the conclusion that consumers usually choose the product with the average price because they usually associate quality with that amount.

If you want to sell an item quickly, price it at a lower price than normal. The purpose is to make customers see that they are in front of a bargain so that they go ahead and buy the product.

2. Take advantage of sales seasons or special days

Both the sales or Christmas season and Black Friday or Cyber ​​Monday are highly recommended days to add extra promotions or discounts. Always include expensive items next to them so the price difference is clearly seen.

3. Increase the price in response to new developments

When you add a new item to your store, increase its price a little. Many users will buy that product because of the attraction they feel to new features. This way you will obtain greater income and you will always have time to reduce it to its usual price when those first days of euphoria pass. However, you must be sure to offer a quality item that justifies the cost.

4. Go for free shipping

Customers like to order with free shipping. Therefore, it covers these expenses by increasing the price of the items themselves. If you sell low-cost products or products with very different prices, you can offer this alternative if they reach a certain amount of money. Look at the average payment scale to calculate the amount from which you can send orders for free. We guarantee that they will prefer to spend a little more money to reach that minimum than pay shipping costs.

The Data Driven Approach

Time and experience will make things easier for you, but if you also opt for an agency that helps you in this work and uses a Data Driven approach, you will have the advantage of better serving your clients and consumers. At Webmefy we support this work philosophy and make strategic decisions based on data analysis and interpretation.

In conclusion, build a strategy that allows you to play with your profit margin to offer an adequate price that fits your market segment. Base yourself on objective data, review prices from time to time, and get the most out of your sales!

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