How to Price eCommerce Products

We are now moving towards a more digital age where in a lot of people are getting hooked with their gadgets. Further, most of them don’t even bother to leave their respective houses. As long as they have internet connection, laptop, cellphone or tablet.

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Most people nowadays prefer to order online like personal and beauty care, home furnishing, food, clothes and many more. There are tons of big businesses who are shifting towards this era because it’s the trend. A lot of business owners are creating their own shopping websites. I mean, you need to go with what’s new if you want your business to survive. Maybe that’s the reason why some of the most well-known brands went bankrupt because they refused to accept the change in the world of eCommerce.

But don’t worry I’ll be providing some helpful tips for starters on how you can hit your sales if you are a newbie in eCommerce or let’s say the numbers game. This is a nice platform but sometimes you need to play with it for your business to survive.

Competing in the Online World

  • Cost Over Profit

This is very important and sometimes this is always missed by newbies in eCommerce. You need to determine your selling price; I mean, how much are you going to sell your product. But be careful not to overprice, a single mistake may lead a business to its downfall.

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Calculate the total cost: unit cost, shipping fee, paid advertisement (if applicable), employee salary and the packaging (boxes and bubble wrap). Your total cost will be the basis on how much you sell the product, maybe you can add at least 20% to 30%. One of the best tools you can use is the Margin Calculator, this will serve as your best friend.

  •  Spying on Your Competitors

eCommerce is a game of numbers, you need to play with the rules to survive, you need to know your product and your competitors. Consider the price of your competitors, if they are selling the product $20.00 higher than the original price then you can sell the item at least $15.00 or higher. There are tons of sellers out there who wants to get a chunk of that winning product. Remember to always spy on your competitors. This might help you on how you will sell your winning product.

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  • Audience Targeting

It is important to know your customers. Who are your prospect buyers? Once you’ve collated your prospect audience then you have an edge in the world of eCommerce. For example, you decided to sell an eco- friendly paper straw and you wanted to target eco-conscious and go green enthusiast. These people have one thing in common, chances are, they have a high possibility to be converted into customers! Plus, you’ve noticed that some of your competitors are not targeting these types of audience. In this case, you got your winning product plus you’ve found a perfect type of customers.

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Another tip, since you’re the only seller targeting these customers, you might want to slightly raise the price of your product. Hey, buyers are willing to pay if the product your selling aligns with their interest, beliefs or worldview. 

  • Play with Your Pricing

Always remember that customers love to buy a product if they saw the word “Discount”, “OFF”, “Sale” or “Promo Code.” Its an automatic reaction of the brain dictating that “you need to buy it now or else you will lose this opportunity.” Look at the big eCommerce websites, they are doing this since they started the numbers game. This is a good tactic to convert random people into customers. Here are some tips on how you can do it:

Discount Charmer: This is the most famous tactic that eCommerce experts are using and, in most cases, it can helps increase your sales by nearly 100%. You can remove a dollar or two on your listing like $10.00 to $8.00 or $20.00 to $18.99. any type of discount is a charmer to a customer.

Discount Time Line: Most customers tend to panic buy specially if the product is on sale in a short period of time. You can place an advertisement like, 50%OFF 3 days Sale. Possibilities are, people will start flocking at your site because the sale is at a certain time line. This scheme has been around for a long time and it didn’t fail any entrepreneur just look at black Friday and cyber Monday sale.

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Buy 1 Get 1: This has been used most often by grocery stores, but hey, it really works. Who would not want to buy a lotion and then get another item for free! But remember, you need to double the price of your first item since you are giving the second item for free. Or you can also use the buy 1 get 1 50%OFF tactic. Bear in mind that you are not totally giving away the second product for free, you need to get something out of it. This scheme is just a trick to get more buyers in to your site.

eCommerce is a Numbers Game

Always keep in mind that this type of business is a numbers game. You need to check all the possibilities and solutions for you to have good sales at the end of each month. Also, don’t forget your audience because they are the determinant on how you will price your product. There are times where in the total ROI (Return of Investment) will be break even. That’s normal because we will not be able to determine if the product we’re selling is marketable. But once you’ve found your winning product, the right audience and the right price, then you’re back in the game.

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Its normal to have a bad month, even big businesses experience it but they were able to bounce back. Remember that there are tons of products out there that you can sell to a wide variety of audience. Further, you can try the tips that I’ve included on which strategy works for you best!

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