If you have opened an online store, do not forget to define your pricing policy correctly. You can make yourself a great online store, make a good design, add quality and detailed description of the goods, and hang banners about new and great promotions – but customers may not come, because one of the most important factors in making decisions in addition to the appearance of the product, its characteristics is the price of the product.
How To Properly And Correctly Assess The Product For The Buyer?
First of all, try to present yourself as a buyer. What does your customer think, what does he want, what consumer group do you expect? If you are afraid that your thoughts may not coincide with this group, try to ask your friends and acquaintances who are in the right customer group. The more you can reach the audience, the more holistic the picture will be in front of you.
Your pricing policy depends on many factors:
- Where exactly are you located: a metropolis, a large city, a regional or district center?
- Availability of competitors (by product group, by location, by set of services). Find out how far away your competitors are?
How To Find Competitors In Business?
If you are in big cities or megacities where competition is very close and fierce – in this case, I recommend to set the price in the same range as your competitors. If you overestimate the price, customers will go to another store by viewing and comparing your prices.
If your store is in a regional or district center, the situation is different. First, you are remote from the metropolises, therefore, not all advertising from there will reach customers. Of course, your customers will be able to use the Internet and can make an order in another store in the metropolis.
- they will have to wait a long hour for delivery and pay extra for it;
- if the goods need to be serviced under warranty – customers will have to send, receive the goods;
- you are located locally, so the buyer will trust you more (you are “neighbors”);
- in addition, you can provide a number of services that can not always do the distant and large online shops (home delivery, communication with the client, support, advice). APO by mageworx will help you;
Search For Customers In The Store
Try to identify the need for your products or services for local customers. By analyzing the gender and age composition of the population, you can preview the tastes and desires of your customers. Remember to include current fashion trends that are constantly being imposed on people: Internet, TV, press, cinema, music.
- Calculate your margin so that it covers your expenses
- Your margin should be calculated as follows
- Dealer price + surcharge = product price
In this case, your price should not be higher than your competitors.
Of course, you can’t compete with giants who have high turnover. But you can reduce the price of the product by the lowest possible percentage, so that the buyer decides to buy, assessing your position, the quality of the site, the description of the product and the price of the product, with a lower price than your competitor.
For example: a competitor’s product costs $ 500. Place the price a little lower – $498. Reduce the price of $ 2. you will not go bankrupt, but strongly force the buyer to hesitate.
The Main Thing, In This Case, Is Not To Overdo It!
The question of pricing should be taken very seriously. If you start to sell the goods “very expensive”, and later reduce the price – you will remain behind the glory of the expensive store. And this will narrow down your range of potential customers.
If you lower the price very low – people are suspicious to look at record prices.
I have had cases when customers refused to buy a product at a lower price, explaining their refusal that they are sold a non-working or defective product. When I asked them why they thought so, I heard the answer: “And in the next store ‘B’, the same product is X% more expensive and you have too low a price!”.
The question of pricing is a matter of compromise between you as a business owner and the customer. The client, of course, wants a cheaper price. And you, – as the owner of the store – want to earn more. Skilfully balancing the price of the local market, its costs, and profits you can attract a buyer.
Remember, the cost of the good is determined by its necessity! Also, don’t forget to read up about the news about customers soon being able to buy Bitcoin using PayPal in this PayPal to BTC exchange article by Hiribi.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.