E-commerce is the buying and selling of products and services online. There are more and more e-commerce platforms than ever through e-commerce apps and websites, and even through social media. E-commerce is a good way of widening your market, but unless you have a truly unique product, you’d be competing with a lot of businesses and individuals who offer the same or similar products online as well.
The more common and popular your product is, the more you’d have to compete with other sellers online. In this case, you’d have to up your game and find the right price to compete in the online market without losing money. So, here are certain tips and strategies for you to be more competitive when it comes to pricing your product through e-commerce:
Be Wary of Your Costs
As much as possible, you’d want to offer low competitive prices for your products online, but you also need to make sure that your price doesn’t go any lower than its break-even price — the amount that covers all cost wherein you neither profit nor lose money from selling the product. So, when setting a price for your products, always take into consideration all the costs included in making or acquiring your product (from raw materials, taxes, logistics, labor, etc.).
Know Your Competition
To know that your pricing is competitive, you have to be aware of how your competition prices similar (or the same) goods that you’re selling online. There are a lot of options in doing so: you can manually check for their prices individually, you can use a shopping comparison engine, or even go further by using a competitor monitoring software so you’d be updated of their pricing.
You should also check specific time-based strategies, wherein prices increase or decrease (become discounted) during certain times of the year or certain seasons. If you’re selling phones, check when your competition usually lowers their price (and for how much) during Black Friday. If you’re selling swimwear, check when similar sellers start discounting or make deals before or during summer time.
Check On Your Product’s Availability
Similar to trends, you should check on the availability of your product. Are they available all year round? Are they limited edition or seasonal? Most of the time, consumers would be willing to pay more if they know that the product is of high demand but low in supply. If you see that your competitors have less or no stock available, and you have more, you can take advantage of that and price higher knowing that your competition can’t compete with your stock or quantity. So, it’s best to check market trends and understand what’s in demand (and if there are foreseen increases in demand for the product) so you can stock up beforehand.
When You Can’t Beat Their Price, Go Strategize
If your competition can sell similar (or the same) products lower than your product’s break-even price, then take a different approach; don’t lower your price and lose money to compete. You can set a price with a profit margin that you’re comfortable with, then market your product as being more superior in quality. Or you can offer freebies with your products, or better yet bundle them in a way that your customers would feel like they’re getting more value.
It’s important to keep up with the competition, especially in an ever dynamic and growing field of e-commerce. So make sure that you keep these strategies and tips in mind when pricing your products on your online store or any e-commerce platform.