Nowadays, ecommerce is constantly growing and, as a result, competition is also increasing at a rapid pace. If you have an ecommerce business, you will know how difficult it is to set prices that are in line with the market. Good ecommerce pricing strategies to set prices without losing margin is essential to avoid being left behind and to improve your sales.
It takes a lot of market research and tracking your competitors to be successful in online sales, especially when it comes to setting prices down. Implementing ecommerce pricing strategies to set prices without losing margin is possible through proper monitoring of your competitors and the prices that are changing every day.
What type of ecommerce pricing strategies exist?
Here are some ecommerce pricing strategies,which you can apply to your business to make it successful.
- Market penetration strategy: Here, a product is introduced to the market at a low price, which is then successively increased. With this strategy, a market share can be created and a new product can be positioned.
- Price discrimination: also called price differentiation. It is used when a brand offers different prices for the same product, adapted to the market. This can be for example regional, generational or quantity factors.
- Hi-Lo pricing strategy: this is a strategy in which a company launches a product at a high price and then reduces it, as it may lose relevance over time or novelties. Some examples liquidations or sales at the end of the year.
- Dynamic pricing: This is one of the most effective strategies. It is a dynamic and flexible strategy, based on your competitors’ prices and market demand. Its focus is mainly on monitoring your competitors and adjusting your prices as they change. With an automated dynamic pricing tool, you can decide when and how much to change your prices compared to those of your competitors. For example, you can decide to always be €1 cheaper than your biggest competitor, or always stay the same. It is the perfect example of an ecommerce pricing strategy to set prices without losing margin, as you can set the margin and rules you want.
There are several ways to implement ecommerce pricing strategies without losing margin, but you have to identify the needs of each company, and also be aware of who your competitors are. Having the necessary tools to carry out your strategy will allow you to make better decisions and adjust prices to market demand.