Pricing strategies are, today, one of the best kept secrets of online retailers. In fact, the analysis of Amazon´s pricing strategies and other online giants is constant; consider how changes influence trends, what gives more value and how sellers adapt to this marketplace to enhance their conversion.
And in this constant struggle to improve sales within a nearly bleak digital competitive landscape, optimizing the sale prices of each product is essential to avoid having to undergo continuous sales and discounts. Only in this way can you get to position the ecommerce brand as a reference for customers, who also take into account many more factors than the lowest price when making a transaction.
Precisely, price optimization strategies allow the retailers to maximize the potential of the sale of their products, planning real objectives over time and adjusting their decisions to the changes that are imposed in the market at every minute. What to take into account to successfully optimize prices?
1. Product lifetime value. Before establishing the starting or basic prices for each product it is essential to analyse its temporary nature. Dealing with seasonal products involves managing the catalogue correctly to apply the appropriate pricing actions to each segment.
2. Monitor the competition. The more data of your competition that you obtain the better the vision of the global market panorama you will have. Yes, the key is in the scope of the data and its quality. The really interesting thing to optimize your prices is to know in detail the prices at which the products of your catalogue are sold in other ecommerce, as well as to control in which profit margin they are.
3. Dynamic pricing. When choosing a partner with whom to enjoy the benefits of technology applied to our strategy of price optimization, it is essential to address characteristics such as the sector in which the tool is specialized or the capacity to update it. In this sense, it also influences the number of operations that can be executed and the timing established to start the parameters set.
4. Profit margins. It is essential to verify that with the new prices, those that should help us sell more or better, maintain profit margins of the ecommerce, or that, at least, the total of the expected sales, will compensate it. In fact, this is one of the main errors that are made in ecommerce when applying discounts or, simply, when trying to beat the prices of the competition.
By keeping these four factors at the forefront of the strategy to optimize prices, it will be possible to carry out successful repricing actions and adjust the ecommerce catalogue to the needs of the market at all times.
Find out how Minderest can take your business to the next level.
Contact our pricing experts to see the platform in action.