Online business, be it selling, purchasing, or manufacturing, involves a whole lot of dynamics. It is not about any random, single factor but the outcome of an interplay of multiple factors. When you want to sell your products online, you need to analyze the market properly before zeroing in on a product, mark your target audience, then choose the right pricing in order to let your business or brand thrive. Now pricing a product is not simply based on the costs associated with manufacturing it, but the market trends and the product demand also play a significant part in it. We’ll now see some of the factors that can help you decide the right pricing for your product so as to let you and your business or brand prosper in this competitive eCommerce industry. It is not at all recommended now to base your pricing on the cost incurred in producing, manufacturing, or in other processes involved in making the product. This will undermine your complete marketing strategy and label you as a profiteer in the market. Today’s world is all about seeking plans which provide value for money. They need satisfaction more than anything else. So, basically, the emotional aspects are to be focused on when trying to sell online, along with keeping in mind the present market trends as well. However, going overboard with pleasing people might have unexpected results as people would be left wondering as to why the price of your product is so less than the other sellers in your category. You need to stay in the race and then try and present your product as something worth buying. Let us look at three such factors which influence the buyers today, in this generation of technocracy.
- Value – the first and foremost thing that people seek is value for money. They want to get their money’s worth while buying a product. People now don’t mind paying any amount if they get a product worth that amount. It all depends on the quality and the level of satisfaction you provide the customer with. You need to figure out how much value you are going to add in to the customer. How your product is going to make it more easy for the customer? Is it helpful or is it what the customer actually wants? Here, reviews play an important part. People learn from other’s experiences if the product offers all that it claims or not. So, it is better to be safe than sorry. Honestly state the characteristics or features of your product to avoid any negative reviews or bad experiences later. Claim what you have achieved and then price your product. Also, while going with fixing the price you need to weigh out your product with the ones already available in the market.
- Competitors – this is the next factor which is detrimental to your product price. As already stated that pricing your product way below the average price of you competitors can have an unexpected result. You might confuse your probable buyers making them wonder about the quality of your product. So, keep a check on your competitors brands but don’t go overboard in the name of competition. Analyse the pricing strategy followed by your rivals, understand the variations in prices of different versions of a product and utilize it your benefit. This is very crucial when entering a highly competitive market. Observing the price levels maintained by your rivals not only gives an idea about the market situation but also about the kind of audience your product is going to cater to.
- Your audience – this brings us to the next very important factor, i.e. Target audience. As soon as you decide which product to sell, you need to sort out the kind of audience you are targeting. Your target audience is an integral part of helping you determine the price of your product as they are going to be your probable buyers. Also, with getting to know your target audience, you need to pay close attention their budget. How much are they willing to spend for the kind of product you sell? What are the preferences regarding the price of products in your category? You need to make sure of the class you are going to attend to. Whether your audience focuses more on quality or on quantity. Either you could go for a low quality, high price ticket or a big quantity, low price approach. You could do away with high pricing or not? All these questions can be answered only when you perfectly know your target audience. This will also help you set promotional offers according to the demands of your audience. If you sell high end watches, you are not expected to go for buy one get one offer, similarly, of you are selling a grocery item or something used in middle or low income group households, then you are going to set the price accordingly and would also want to add on frequent discounts to attract more and more customers.
- Stage – it matters if you are a startup entrepreneur or an established brand. This follows the tendency of people where they want to buy from an established brand mainly because of their trust. A startup entrepreneur might pose some risks for new customers as they don’t know about their credibility and can’t judge the quality of the product just by looking at it. So, your price should also be set keeping in mind the exposure that you have had. Being a startup, you can’t expect to match up with the price of an established brand but definitely if you give your buyers a better quality at a low price for some time, then it might do wonders for you. So, for a startup you might have to start with a little low. This will allow more people to order your product, and once they get to see the quality and find it worth the value, then ultimately you are going to widen your customer base. Initial stages are crucial for you as you need to build up your profile and get as many positive reviews as you can. You can’t be greedy in the very first stage and drive away people just by thinking of profit. You need to consider and target a wider audience base first, then narrow it down according to your product and eventually settle on a reasonable price.