Inventory management and pricing strategies

03/06/2020

Angela de la Vieja

A well-managed inventory is essential for any business or eCommerce store. Optimal inventory management should reflect a balance between the interests and expectations of your clients and your costs. That’s to say, having enough items in stock to satisfy demand while keeping inventory costs at a minimum.

The presence of “dead stock,” excess stock with a high probability of not being sold, occupies space that could be dedicated to more successful products while also increasing operating costs. Conversely, if your stock level is low, you could be missing out on sales opportunities.

Excess inventory

Beat the competition’s price if you have too much of a certain product in stock

You should be the most competitive player in the market, even if this makes you lower your profit margin. A competitor price monitoring tool will allow you to identify the competition’s prices so that you can set yours below theirs and offload this stagnant part of your inventory.

Use pricing psychology

To maintain control of any excess inventory, here are some tips that use pricing psychology.

“Price Anchoring”: place a more expensive item from the same category next to the one that you want to offload. This will awaken the customers’ interest and increase the chances of a sale.
“Bundle offer”: grouping two different products together as a special offer is a trick that you can use to reduce the number of products with excess stock and of low yield.
Free products: offer something for free with a product that sells well. You can use this to improve the rate of sale for that product.

Low inventory

In the majority of cases, we can increase the price of a product that is in high demand if we have a limited supply of stock to avoid running out of that item too quickly. This can be useful in special situations where there’s a lot of demand for a product, whether due to popularity or exceptional circumstances.

Your competitor’s stock

Knowing your competitor’s stock is a key piece of information offered by monitoring tools. These tools will notify you when a competitor runs out of stock, which will put you at an advantage. Your chances of selling that item will increase and you’ll even be able to increase your profits through its sales. This is because if the user perceives the good as limited, their willingness to pay for that product will go up, so they’ll accept a small increase in the price of that product.

Dynamic pricing and inventory management

Thanks to dynamic pricing tools, you’ll be able to go one step further and integrate values such as seasonality and sales volumes into your pricing rules for inventory management. With this, you’ll ensure that your stock rotation follows an optimal cycle. For example, if your eCommerce business sells swimwear, a dynamic pricing system will take into account what month it is (at the beginning or the end of summer) to adjust your prices accordingly while considering the sales volume, stock availability, and the prices of the competition, among other values.

11/11/2022

Consumer behavior: How can behavior tracking be effective for setting the right pricing strategies?

Behavior tracking is becoming massively popular today. As a result, pricing strategies born from studying consumer behavior are a merchant's dream come true. If done right, it can conquer every market for the business quickly. With abundant data available, the strategic makeover of the pricing models is becoming easy for companies.

What is behavioral tracking, and how is the data beneficial in pricing?

For a quick understanding, behavioral tracking refers to gaining in-depth knowledge and insights into consumers through their web data. Their browsing habits, spontaneous decisions, shopping interests, and preferences come under behavioral tracking.

How can enterprises use customer behavior data?

Companies can use customer behavior data as a tool to strengthen their hold on the market. A customer’s preferences, values, and tendencies allow businesses to work in sync with them through the collected data. Apart from this, customer behavior can also aid in:

Tailoring customer needs for customer retention

Personalization is becoming the heart of a company’s growth. No matter in which area an enterprise is functioning, tailoring the services, products, and solutions is becoming increasingly crucial. Uniqueness and personalization attract the crowd like no other.

Increasing the overall value

One of the best ways customer behavior data affects a business is by upgrading the value of customers for the business. The customer’s characteristics allow the company to target the people that match the business prospects well.

Optimizing every type of content

Everything that is up for digital display requires content. You must have seen companies unveiling their products or services through advertisements and making the initial public appearance. Two essential sales strategies – upselling and cross-selling comes through content optimization.

Pricing Strategy

Last but certainly not least is the influence of customer behavior data on the pricing strategy. The pricing strategy essentially constitutes content derived from data analysis. Companies need to have a dynamic approach to the pricing system to attract the right customers.

17/02/2015

Saint Valentine’s Day, always a good opportunity

V-Day is looming, a long-awaited date for all and also a good occasion for the eCommerce. According the study conducted by Prosper Insights and Analytics, it is forecasted the average consumer expense that day will be the highest in last years. Furthermore, 25% of them will buy online, which means an increase of 4% regarding 2014 (The US department of Commerce). This is, therefore, a key date where market competitiveness increase and which could be assumed as a big opportunity for our business or, a big fail if we do not adopt the correct strategies.

How to turn this event into an opportunity? To achieve this goal, we need to adapt our prices to this hostile environment, i.e. we need to develop an appropriate Dynamic Pricing strategy that allows us to adapt our prices to the variations produced in supply and demand and to position us ahead of our competitors. In V-Day, the frequency in changes will be higher, carrying it out each hour or even each minute. It is estimated that 65% of leader retailers have the ability to respond quickly at these variations, such Amazon. For this reason, it acquires great importance the correct use of a software specialised in price motorisation of competitors. Do not miss the time and adapt your business to new adversities.

28/12/2022

Which are the best footwear marketplaces to sell on?

Footwear marketplaces are booming. The last decade has seen the launch of new specialized marketplaces with millions of different users. Among them are Spartoo, Sarenza and Farfetch, portals with international reach. Their main value is that they unite hundreds of footwear brands, as well as offering clothes and accessories. Although each has its own characteristics, they are all vertical marketplaces, i.e., they focus on a specific area, and their sales categories are interrelated. For sellers, these portals provide an opportunity to expand sales channels and drive the globalization of their e-commerce business. We explain how to sell on these footwear marketplaces so that you can assess whether they align with your plans for the future and then start defining a possible pricing strategy.