In the world of eCommerce and online shopping, pricing of the products decides the eventual sales and profits. So business owners should understand how best to price their products to stay ahead of the competition. While fixing the price of your products, remember that if the company is reputable, then the customers will shop at the online store that offers the lowest price.
Types of Pricing
To have competitive pricing, it will help if you are aware of your competitor’s pricing in real time. For this, you have several price tracking tools and software available in the market, which can help you monitor the pricing pattern of your competitors. The two types of pricing followed are fixed and dynamic pricing. Online retailers adopt both of these for various products, although dynamic pricing does have its benefits. Fixed pricing is setting a price which doesn’t change regardless of reason or condition.
Why Dynamic Pricing?
In dynamic pricing, the business adjusts the prices of their product depending on its supply and demand. This is done in real time. Dynamic pricing can help you stay ahead of the competition in the online eCommerce race, thus increasing the demand for your products and increasing your sales. This type of pricing also lets you set tiered prices on the various products, for different category of customers. Consequently, you can increase your outreach and tap into a broader market. Over time, your customers will realize that you are more than willing to adjust the cost of your products and will be compelled to remain loyal to you. Customers will give a positive review for your business, thus helping drive traffic to your online store and website. This will, in turn, increase the sales for your company. Using price monitoring software can help you get the pricing right. For effective dynamic pricing, it is important that you become familiar with your customers. You should know the median age and class of your market, so you would know how to use dynamic pricing to your advantage.