Pricing is one of the most important aspects you have to pay attention to as an online seller. Pricing strategies help you with that and also help you increase your profits and allow your items to sell more. But to create a pricing strategy, you must take some time and analyze factors like supply and demand. Demand and supply are just two that you have to take in mind when building a pricing strategy. Let’s look at the complete list. 

1- Supply 

When there are a lot of competitors and supply for one product, the recommendation is to lower the prices. Why? Because on the market, there are many options, and one of the ways to differentiate from the rest is with your pricing. Razorpay discovered that 60% of consumers consider pricing the first criterion of their purchase decisions. Decreasing your prices a bit will separate you from the rest, and you will gain more customers.      

2- Demand 

When you release a new product or when one of your products becomes a top seller, it is time to increase your prices. Since the market is in ‘need’ and demanding that product, you can take advantage of that. Of course, there are some exceptions, and you must be careful. For example, in the case of natural disasters or deaths (which happens frequently with music artists and athletes), it is recommended not to increase your prices because that is considered price gouging.    

3- Stock availability 

You must monitor your inventory and competitors when planning a pricing strategy. When you have high stock levels, you have an advantage over every online seller. For example, if you sell pencils and know that your competitors have less stock than you, you can take advantage of that and raise your prices. You can also lower them if you see that you and your competitors have the same amount of stock. That will help you differentiate yourself from them and gain an edge. You will sell more products and increase your profits.   

Manually monitoring your competitors takes a long time, and you are more likely to make errors during that task. That combination does not work in eCommerce. You will need a tool to do this automatically, more precisely, and with no mistakes.    

4- Time 

You cannot have the same pricing strategy for a lengthy period because your competitors will change theirs when they notice you are beating them. Therefore, from time to time, you must check yours and optimize it to prevent that. 

Also, you have to take advantage of seasonal demand. Summer and winter are perfect periods to have promotions. Use those days to move old stock or sell more. Other days that can qualify as seasonal are Black Friday, Cyber Monday, and Christmas.  

Conclusion 

These factors contribute to pricing strategy creation and optimization. Knowing that will help you develop perfect pricing strategies that increase your sales and profits. But, you will need a tool to help you monitor, scrape, and create pricing strategies. PriceTweakers does that and more! Our software automatically monitors your competitors and allows you to build more than 30 pricing strategies (all customizable to your business needs). Contact us for more information!    

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