![]() It’s also about finding a balance between selling as much as you can and making a meaningful profit from each of your products.Īnd that calls for a solid data collection mechanism. The short story isĮvery pricing decision is important to your business’ growth, and that’s why you need to use data to make the right decisions.ĭon’t just rely on your gut, or price your product according to your costs. In other words, a $119/mo tool led the brand to 38X its ROI. It’s a striking 5.5x increase in revenue growth that equals a $13K marginal revenue increase. It’s an incredible 466x increase in scalability.īut more importantly, tracking all those products they had to overlook before helped them take the regular 6-months period growth from 1% to 5.5%. Once they switched to a pricing software, the number of data points jumped from 30-40 per week to 14,000. That’s when they decided to start automating their pricing process. They realized that they were missing out on a huge amount of data. Just Tools, for instance, a 40-year-old power tools retailer with over 15 years of digital experience, could only track their top 2-3 competitors. Instead of focusing on one or a few high return products, track competitors on all products, and take every opportunity to improve profitability. Even if it’s a slight increase, you should go for it.īe realistic about your target profit margins. When competitors are out of stock, you can increase your price. That’s why you should use a price tracking tool like Prisync, which automatically collects competitors’ price and stock information for you and shows them in a single dashboard.īut you don’t always have to wait until there’s a general increase in market prices. We’re used to seeing hourly, or even minute-by-minute changes in online prices. Manually tracking 20 competitors on 50 products takes approximately 12.5 hours.Īnd before you can complete the task even once, your data becomes obsolete. Use a price automation tool for competitor tracking That’s why you need to use a pricing automation tool. You need a gazillion spreadsheets to have a handle on profit margins for each product, on each of the platforms or marketplaces.There are too many platforms to track pricing on. ![]() It takes way too much time to track ALL of your products.It’s much harder to track competitor pricing for an eCommerce brand for 3 reasons: If you ignore your competitors’ pricing you can end up setting a price that’s way above the market average.Īnd then your product gets to sit out there like a lame duck. Why would anyone pay $2089 for an iPad when they can get the same exact model for $1264? That’s why Amazon has worked so hard to grow its’ Amazon Prime membership. Pricing remains a top priority for the modern consumer, who's buying journey differs greatly from that of the previous generation, when brand loyalty was everything. Studies show that 70% of shoppers say competitive pricing is the most important factor when choosing a product, above all else. With everything at our fingertips, why not find the best deal? Online consumers like to go price shopping. If you’re still adding a markup on your cost to find the selling price (cost-based pricing), you’re missing tremendous sales opportunities. You might be wondering, that sounds competitive, why can’t I just calculate my costs, and add a few bucks? This involves monitoring your competitor’s pricing, across the channels, platforms, and marketplaces that you are in. Pricing intelligence (or competitor price monitoring) refers to the awareness of the changes in price and their impacts on your business. This type of pricing strategy takes into account all the value that a consumer would contribute to the product, and then price it according to that.Ī classic example is Apple’s iPhone products that are sold at increasingly higher prices because of the perceived value of the brand and not the costs of the electronic parts in them. This is when a company prices its’ product based on how a competitor prices theirs. This is when a company calculates all the costs that go into making the product, and then sets a target margin. There are 3 common pricing strategies that everyone knows about. Here are the 3 most common pricing strategies: Price is one of the major factors of any commerce (both online and in-store).Īnd you might have heard some of the pricing strategies that brick and mortar stores use to maximize their profit, but eCommerce has taken pricing to a whole other level.
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