It is no secret that consumers typically conduct research within and across platforms before proceeding with a purchase. The higher the price, the more extensive the research. What factors influence retail pricing strategy? Is it always about how low can you go to win the competition?
Retail pricing is influenced by many factors, including the cost of goods, competitors’ prices, demand and supply, consumer perceptions, target market, seasonality and trends, marketing and promotions also play a part, and external factors such as economic conditions, inflations, or government regulations.
So, is the e-commerce pricing strategy always about the lowest price? The answer is no.
Here are more tips and strategies for setting profitable prices while remaining competitive when you sell generic or wholesale items:
- Go the extra mile. A presentable reusable package, for example, can be a valuable addition, especially if it can carry your logo and information about your shop with it.
- When you sell what everybody sells, sell relationships. Excellent customer service and social media communication make a significant difference.
- Shameless self-promote? What about asking consumers to promote? After a successful delivery, ask for a positive review or testimonial. There is no shame in that. Reviews, especially recent ones, matter more than the number of followers you have on social media.
- Geographical target market. Pay attention to those who are geographically closer to you. In exchange for faster delivery times and lower shipping costs, this market would be willing to pay a little higher.
It’s important to note that the importance of those factors can vary depending on the industry, product category, and specific business circumstances. Retailers must carefully analyze these factors and find the right balance to set prices that are attractive to customers while still maintaining profitability. As pricing strategy is crucial, you may want to discuss it further with your e-commerce agency.