This depends heavily on the identity of your web store. The easiest way to win the customer for you, is to offer the lowest price on your web store. The disadvantage is that the margins are so low, that it is questionable whether you get any revenue. A good pricing strategy can make the difference. But how do you ensure that you have a good price strategy that help you sell your products and still earn something? There are a number of elements, outside of price strategies, that help you with this.
What will be your message? “Why do you do what you do?” With your message, you want people to identify with your brand or web store. Apple is doing this very well. Apple does not say that they make the best computers or phones. They say they make innovative products that challenge the status quo. People like this and therefore buy the products from Apple. Apple has a stable support base for a reason. Nobody puts a tattoo of the car brand Volvo. People do tattoo the Harley Davidson logo on their backs. Harley Davidson does not sell the best motorbikes, they sell freedom and camaraderie. And that is why people buy their bikes. People do not buy Porsche because it is better than an expensive Audi, but because a Porsche has more status. Expensive cars can be sold cheaper, but then they no longer have any status. People buy these cars precisely because they are expensive. That can also be a pricing strategy. Your message is also an important part of your strategy. Why does a client buy from your web store and not from your competitor? And what is it that you client buys from you anyway? Determine your price based on your message.
What is your position in the market? In what kind of market are you: new or saturated / high competition or low competition? / products or service? What is the pricing strategy of other companies in the same industry? By looking at the price strategy of your competitors you can also determine the right pricing strategy for your web store. Perhaps by using the same pricing strategy or using a very different pricing strategy. Or perhaps by employing that activity that no-one else does.
What is unique about your product, why would this have added value for the customer? This is an important question, when determining your pricing strategy. The added value of a Porsche is precisely because it is expensive and therefore has status. Please note that you do not pay attention to what makes your product unique, but why it is unique. ‘What’ is if your engine is the best. ‘Why’ is if your motorcycle gives freedom and camaraderie, just like Harley Davidson.
Choosing a pricing strategy
The next step is to choose a pricing strategy in a direction that suits you and your web store. Focus not only on the price, but also on:
- Demand: flexible in the flows of supply and demand;
- Competition: lower prices;
- Costs: certainty of profit;
- Identity: of your web store and your product.
For an elaborate explanation about these different pricing strategies, you could read our blog about pricing strategies.
Design of a pricing strategy
The next step is to determine what the content of your strategy will look like?
- Premium / Exclusive;
- Economic / Budget prices;
- Psychological prices;
- Dynamic prices.
Or an appropriate combination of the above price strategies. Whatever matches your identity.
You can’t see the forest through the trees anymore! All those market researches and difficult price strategies. At Pricesearch, we want to make it easier for you to determine an effective pricing strategy. With our software, you can easily keep track of the prices your competitors ask for equivalent products you offer. What is the market like? You can now try Pricesearch completely free of charge for two weeks!