There are numerous online business ideas, and one top idea to start an online business is to spend enough of time in ecommerce pricing strategies.
Is ecommerce pricing the main focus of any online business? The truth is from a business point of view online pricing really matters. Here are some important statistics on ecommerce prices:
• More than %60 of online shoppers worldwide considers ecommerce pricing as the very first criteria affecting their buying decision. In emerging ecommerce markets, consumers care about online prices even more.
• Around %90 of ecommerce shoppers are quite fluent about hunting deals and invest time for that before deciding on the web-shop where they will shop. This time for ecommerce price comparison is measured to be around 10 minutes per every item purchased.
• Price Comparison Engines are a key part of ecommerce marketing stack, as they constitute around % 20 of ecommerce traffic for all sorts of product categories. Obviously this ratio is even higher for product categories where online prices are even more important, and the shopper persona is naturally more price-sensitive, for example, in consumer electronics ecommerce.
There are many ecommerce pricing strategies. Some are mentioned below:
1. Cost-oriented ecommerce pricing
Any ecommerce company active in any product category should at least be aware of its costs and at least should have cost-oriented pricing as one of its ecommerce pricing strategies (rather a simplistic one) under its belt.
This ecommerce pricing approach requires the company to be able write down its unit product costs for each of its products in its portfolio, and then set a target profit margin for each of those products and price the products as the sum of the unit costs and the target margin.
It may sound and seem too obvious but it’s really shocking to see how so many ecommerce companies lose track of its unit costs and fail to even apply this strategy and completely miss the balance between its unit costs and product prices.
The main reason behind this miss is that the unit cost that we are talking about here, is not a given in any business environment, and it should be deducted in parallel with the operations within the company. In other words, the unit product cost is not only the cost that an ecommerce company pay for the supplier of that product on a unit basis but it’s actually more than that.
2. Market-oriented ecommerce pricing
An ecommerce company, like any other company from any industry, is not alone doing business in its market. There are tons of companies active in the same industry, around 12 million to be more exact. As part of this 12 million, each company active in any country in any product category, directly competes with several direct competitors.
3. Consumer-oriented ecommerce pricing
In every aspect of ecommerce, customer-centricity should come first above anything else, and pricing decision making is not an exception to that.
To offer perfectly tailored price-points to its shoppers, any ecommerce company should be easily and clearly answering these 2 questions:
• What is my shop’s unique selling proposition? – Do I mostly deliver a hard to find value and satisfy my customers, of do I deliver them a value that can be found elsewhere at the right price points?
• Who are my customers? – How do their minds work while shopping my products and is it their heart or their mind speaking while buying my product?
The approaches that we shared here are the 3 core pricing approaches that you can focus on for marketing and business purposes.
Business and marketing
This blog post was originally published at 3 Ecommerce Pricing Strategies That Every Ecommerce Company Should Know. The business on the internet accepts guest blog posts both paid and free, contact us for advertising inquiries.A blog on business,marketing, ecommerce.