The process of developing a pricing strategy for your E-commerce can turn out to be a challenging one. Being a responsible seller, you need to familiarize yourself with the E-commerce pricing strategy that will help you avoid mistakes and thrive in the competitive landscape. So as to equip you with an AMS E-commerce integration strategy there are some pricing strategies that you need to consider
In simple terms, an E-commerce pricing strategy does not have a structured definition but it can be defined as the process of setting up the prices in your product listings. This is taking into consideration multiple price aspects into account. A pricing strategy takes into consideration various components like production costs that enable them to arrive at the optimal price of a product. The reasons why an E-commerce pricing strategy is important due to the following reasons
- It allows you to set competitive and fair prices that ensure the sustainability of the E-commerce business.
- A pricing strategy establishes the brand and distinguishes it from the competition
- It enables you to attract and retain customers through fair and transparent pricing.
The Effective Strategies For E-Commerce Business
By now we have gone on to implement an effective pricing strategy and its importance, there are a few pricing strategies that you may go on to adopt
Cost- Plus Pricing
It is also referred to as markup pricing where you incorporate a fixed percentage into the total production cost for a single production unit. A common pricing strategy that is being used by retail stores or online sellers where their main aim is to achieve 50 % of the profit. To be able to successfully implement this pricing strategy you need to know about cost plus formula.
Apart from E-commerce event tracking this strategy may be used for small businesses. They are known to incorporate a total profit percentage to their overall product cost.
Penetration Pricing
If you are looking to capture a portion of the market share then you need to be aware of what a penetrating pricing strategy is. It is a popular strategy that is being adapted by companies to attract customers to their products.
In penetration testing, the initial offer price is lower than that of the competitors. The logic behind this move is that it can capture market acceptance and it will be loyal even if the prices are raised after a certain point of time.
Psychological Pricing
This is another form of pricing strategy that you need to consider. In this approach, it goes on to harness the psychology of pricing that influences customer behaviour. It goes on to encourage spending on all counts. The best part about this pricing strategy is that it has various variations and charm pricing is a common name.
In this method, it is seen that the prices are being set to the odd number. This may develop an illusion of a lower price, though it may not exactly work out to be the same.
