Well said by Jon Miller “Knowing who your customers are is great, but knowing how they behave is even better.”
It is a known fact that 90% of buying decisions for any product depends on its price. For example, if you find a dress at a store at $100 but the same dress of similar quality is available at $95 at another store, obviously you will buy the dress from the another store. In case of brick and mortar stores, sometimes the buyers don’t have time to check each and every shop and so might not compare the prices by visiting each and every store. But, in case of online stores, it becomes convenient for the buyers to compare the prices on various stores and take a buying decision.
Being price such an important factor, it becomes important to apply repricing strategies and Online Inventory Management Software in order to beat the competitors successfully in terms of sales and profit. But, do you know what the different repricing strategies are and how to execute them? Here, we will discuss about different repricing strategies which after following can get desired results for your online business.
Price Competitively But Don’t Be the Cheapest Seller
This strategy has been used by Amazon merchant “Ryan Grant” on his 70-75% of his products helping him to win the buy box and at the same time earn reasonable profits.
It is necessary for your price to be competitive but don’t set the price to be cheapest all the time. Many buyers consider the cheapest product to be a low quality product. So, just do some research with your competitors and decide the price. The suggestion would be that the price of your product should be slight higher (approximately 1.25%) than the lowest price product. So, now you are not at the lowest price but are still inexpensive to be considered by the buyers.
Select FBA Option for your Products
If you are selecting FBA (fulfillment by Amazon), the chances of winning the “Buy Box” becomes higher. The other advantage would be that you need to compete your prices with only FBA products. Though this strategy would not yield more profit for you but you can apply this when you need to really clear your stocks. Moreover, you always have an option of selecting the minimum price, so you will never be in loss even if you use this strategy.
Include Shipping In Your Cost
Most of the time it happens that the customer chooses the product which includes the shipping cost. This doesn’t mean that you can increase the price of the product and include shipping in that. The customers are smart enough and they will be comparing your prices with the competitors who have already included shipping in their cost. By doing this, you may not be able to earn high profit, but will be able to become the first preference of the customers.
Product Condition
If your product is used, then you need to compete with other used products and set the price accordingly. The price of your used product cannot be more than a new product or good condition product. Customize your competition according to the condition of your product.
Analysis of Demand and Supply
Do some research to know the demand and supply trends of the products you are selling. Not all products are on heavy demand you can raise your price to enjoy the profit and if the demand is low then, you need to offer the products on discounts to sell them.
Competitors’ trends and Reports
By analyzing competitors’ trends, you can take future decisions of whether to increase the price or decrease the price of a particular product. After studying your past sales reports, you can anticipate future sales and decide whether to reprice the product or not. You can also take a decision whether the product is required to reprice to sell it, or bundling it with another product can also help you out.
Conclusion
One of the best ways to increase profits is to place your products on online stores at a competitive price. It may happen that some of your repricing strategy may not work out, but you need to do some experimenting and find out the best strategy suitable to your business. If you have got more than 50 items in your inventory, then it would be difficult to reprice each and every product manually. So, it would make sense to go for a repricing tool and set a smart strategy for your products to earn maximum profits.
It is a common misconception that Best Inventory Software and repricing tool is used only for lowering the prices. You can set Minimum and Maximum price of a particular product, so that your product price doesn’t go above or below specified limits and you can have complete control over it.
No matter which repricer you are using but it is important to use your business intelligence and experience also before deciding on a repricing strategy because any type of automatic system is as smart as the person giving instructions to it and that is you!!!
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