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The Most Common Pricing Mistakes in E-Commerce

There are various factors that businesses need to consider when pricing, such as product cost, competition, and current marketing trends.

Unfortunately, many companies fail because they make pricing mistakes that negatively impact their business. These mistakes cause them to create price wars and lose customer confidence.

Incorrect pricing can hurt your business performance and provide competitive opportunities. Therefore, in business, it is very important to determine the right price for your product that supports its unique value proposition.

We have described some of the mistakes that managers make so that you do not repeat them in your activities.

1. Lack of marketing.

Many companies may not realize it, but marketing plays a key role in product pricing. How you sell your product determines how much a customer is willing to pay for it. For example, if the marketing and promotion of your products are that you offer quality products at the lowest prices, then customers expect to see low prices when they visit your website. Similarly, if your marketing and promotions position you as a one-of-a-kind high-quality product, customers are willing to pay more. Marketing your product is all about communicating the right information to customers before they even visit your website.

2. Prices are based solely on competition.

Setting prices based on your competitors can be a good idea to avoid losing market share. However, each business offers its customers something different, which is factored into the price of its product. That being said, if your pricing is purely based on competition, you are missing out on capitalizing on what makes your business different.

In addition, some competitors charge very low prices for their products. However, the cost of producing their product could potentially be less than yours. If you follow your competitor, it will be difficult for you to keep your business afloat, and it could eventually mean closing the store. Likewise, some competitors' prices are at a higher level. However, they could potentially target customers with more income than your customers.

Instead of focusing on competition, businesses should also consider other important factors in developing their pricing, such as the cost of the product, your customer profile, your revenue target, and even where your market is heading in the future. This will help businesses set a more accurate price for their products, leading to more customers willing to pay.

3. Market segmentation is not taken into account.

If you offer multiple products, your business is sure to attract a wide range of customers. Segment your customers and take this into account when setting prices. Customer segments differ according to the requirements for your product. The value proposition for any product or service is different in different market segments, and the pricing strategy should reflect this difference. Your pricing strategy should include options that tailor your product, packaging, shipping options, marketing message, and pricing structure to specific customer segments to capture the added value created for those segments.

4. Prices are not reviewed often enough.

It is quite common to see pricing schemes within companies where prices for the entire range are set on an annual, quarterly, or monthly basis. The e-commerce market moves fast, so if your prices just don't change, the market will move away from you, probably leaning towards your fairly dynamic competitors. Thus, price management in an e-commerce company must be consistent with all kinds of dynamic sales and marketing operations, and price performance must always be questioned, tested, and improved.

5. Imposing unreasonable prices.

Avoid this mistake by carefully studying your product and its purpose. Always keep in mind that a product must fulfill its intended purpose in order to meet its advertised price. Getting consumers to overcome their hesitation and make a buying decision is difficult enough. But it is quite real. A product that can satisfy the needs of customers will make them agree to the purchase. Make the price of your products clear to the consumer, emphasizing all the benefits and benefits that he will receive. This will help the client make a quicker choice.

The pricing of your products or services has a big impact on business growth. Your prices can easily alienate customers, but they can also help you attract real customers and increase their loyalty if done right. If you would like to know more about pricing or how we can help your business, please contact us, we would like to work with you.

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