How You Price Your Products Has A Tremendous Impact On Your Business Bottom Line. Thats Why You, As An Online Seller, Need To Find The Pricing Strategy That Works For Your Web Store And Allows You To Achieve Your Business Goals.Costly MistakesBad Pricing Can Have Serious Repercussions In The Form Of Lost Business And Lost Revenues, Yet Many E-tailers Disregard Its Importance. Many New, And Not So New, Sellers Seem Prone To Certain Common Mistakes:Not Tracking The Consequences Of Pricing Decisions. Says Frank Luby, Of Http:Simon-Kucher.com, In A Lot Of Cases, People Are Making Pricing Decisions Very Information-starved. You Should Be Able To Defend Your Prices With Market Research. Monitor The Affect Of Pricing Changes On Your Profit Margins, So You Know How To Adjust Your Prices In The Future.Trying To Match Or Beat The Lowest Prices. A Lowest Price Strategy Is Only Practical If You Have A Sustainable Cost Advantage Over Your Competitors. If You Cant Maintain Those Super-low Costs, You Cant Afford To Maintain Super-low Prices Either.Using Standard Markup Pricing. The Problem With Simply Adding X Dollars To Your Cost To Determine Your Price Is That You May Be Charging Less Than What Your Customers Are Willing To Pay. Even A Slightly Higher Price, With A Small Loss In Sales Volume, Can Result In Significantly Greater Profits. Or Your Price Tag May Be Too High, And Generate Much Less Business Than If You Had The Right Prices.Proven PracticesSo How Should You Be Setting Your Prices? There Are Multiple Strategies That Work Well, But Whatever Strategy You Choose, Keep The Following In Mind:Your Pricing Strategy Should Fit Your Business Goal. For Instance, If Your Goal Is Achieving A Certain Market Share, Your Price Points May Be Lower Than If Your Goal Is Maximizing Your Profits.Your Customers Will Have A Price Range In Mind When Theyre Shopping. You Dont Want To Be Drastically Higher Or Lower Than Every Other Seller. If Youre Dramatically Higher, Buyers May Feel They Can Do Better Elsewhere. If Youre Dramatically Lower, They May Feel Suspicious And Wonder Whats Wrong With Your Products. Check Out Your Competition, And See What Theyre Charging And How Their Products And Services Compare With Your Own.Pricings A Trade-off. Buyers Arent Just Paying For The Producttheyre Also Paying For The Value You Add, Whether In The Form Of Convenience, Better Service, Or Faster Delivery. You Have To Determine What Benefits You Bring To The Tableversus Your Competitorsand What Those Commodities Are Worth To Your Customers, And Adjust Your Pricing Accordingly.No Rule Works Every Timeyoull Need To Adapt Your Pricing To Accommodate Different Products, Target Markets, And Sales Mediums. If You Cant Afford Expensive Market Research Software Right Now, Then Take The Above Factors Into Consideration, And Just Experiment. Start High, Try Different Price Points, And See Where Your Products Sell Best.Dont Underestimate The Power Of Pricing. Its Not Impossible To Find Those Ideal Price Points That Will Allow You To Accomplish Your Business Objectives. Says Luby, All Youre Really Doing Is Finding A Way To Get (customers) To Pay What Theyre Willing To Pay And Not Leaving That Money In Their Pockets.
