Manage Product Prices by Partnering with E-commerce Marketplaces

If you own a business, you must have realized that converting an ordinary shopper into your loyal customer requires consistent efforts. The solution to this age-old dilemma is setting the right price for your product. Research suggests that pricing is one of the most important factor that influences the buying decision by 60% of the customers. This highlights the importance of creating an effective pricing strategy for managing your product prices.

Your product’s price may be influenced by a combination of different factors like the cost price, packaging and shipping costs, profit margins, seasonal trends, demand in the market, the psychology of your customers, and competition. Retail giants update their product prices every 3 minutes on average. Since most of the factors that influence product price are dynamic, SMB owners need to constantly manage their product’s price to prevent overpricing or underpricing it.

The right price for your product is the one that effectively covers the total cost price for the product as well as justifies the market trends. Under normal circumstances, anything lower than the right price can lead to monetary loss, and anything higher than the same can lead to reduced demand. Here is how setting the right price for your product can help you:

Maintain competitive advantage – It is very difficult to sell an overpriced product. Most of the enterprises consider price changes to be the major cause of competitive pressure. If your product is overpriced and its price does not justify the product’s value, your customers will likely go for a cheaper alternative. With so many market players competing for the same target customers, any brand that offers a better deal to their customers may win them over. Thus, if you wish to maintain a competitive advantage, it’s crucial to offer your customers a fair deal.

Generate sufficient profits – Managing product prices is complex and a double-edged sword. Overpricing can make you lose customers and underpricing can lead to monetary loss. Your product’s price should cover the total cost of the product and ensure a reasonable profit at the same time. Underpricing your product may attract customers for a short time, but can lead to serious monetary losses. These losses can disrupt your working capital management. To ensure that you generate sufficient profits, your product’s price needs to be managed with the utmost wariness.

Win customer's faith – Present-day customers are better-informed and aware of prices charged by different sellers. It is now common for customers to research product details and prices online before making a purchase. Sellers need to keep this in mind before setting their product’s price. If your customers find out they are being charged extra, chances are they won’t trust your brand again. You can only win your customer’s faith if they are assured that they are paying an optimal price for your products.

Attract more buyers – The right pricing can work wonders when you wish to attract more customers. If you can provide them what they want at a price that works best for both you and the customers, you automatically boost sales. Prices ending with ‘.9’ attract more shoppers. It manipulates the customers into believing that they are paying less for a particular product or service. SMB owners can use many such tips and tricks to attract buyers.

Correctly pricing your product is crucial and requires utmost attention and expertise. You can overcome the challenges involved in product pricing by partnering with e-commerce marketplaces. Such marketplaces can help you in:

Understanding market trends – Analyzing market trends help you understand your competitors better. If you register on e-commerce marketplaces, you can compare the prices set by other competitors. This gives sellers an idea about the standard rates for different products, alternatives for their products in the market, and if their product is really in demand. In a physical world, conducting this kind of competitive analysis is difficult, costly, and time-consuming. E-commerce marketplaces make such price-comparison faster, easier, and cheaper.

Easily categorizing your products – Products that sell quickly need a pricing strategy different from the ones that sell slowly. For example, you can set a unique price for a best-selling product. Such products need a customized pricing strategy. Categorizing your products helps you to understand where you stand in the complex world of e-commerce. Correctly categorized products also allow buyers to quickly find the items they are looking for without wasting time in finding exactly what they want.

Providing an easy interface for product uploads and fixing prices – Creating customized product listings on e-commerce marketplaces is easy. A good interface helps with uploading product descriptions, prices, shipping fees, images, etc. It also allows mentioning available offers, discounts, and rewards. Such listings can be easily changed and are free to upload. This saves sellers from the hassle of uploading the same information repeatedly and may save a significant amount of money on printing new price tags for the changed prices. Additionally, since buyers get to know about the best offers and other product information in one place, they can fairly compare various options and make the ideal choice.

Providing support in delivery – Since the price of a product is also affected by the delivery charges and money spent to reach the target customer, sellers need a marketplace that can provide both at the best price. Amazon's shipping and referral fees are reasonable and subscribing to the same can be the best solution for sellers. Click here to know about Amazon’s Selling Fee Structure.