A price analysis is the study of the market value of products and services of an e-commerce based on supply and demand at any moment. It allows you to obtain quality information about market behavior to define the best price fixing strategy. It is a useful analysis for business decision making, most of all when different price options are lower, similar to profits, for the same item. To carry out a price analysis we recommend you first obtain a pricing tool that automates the data collection and treatment. Later, follow these steps to complete your price analysis and draw conclusion of your interest:
1.- Identification of e-commerce objectives
Even though the final objective of any e-commerce is economic cost effectiveness, you should establish what intermediate goals you want to obtain with the sale of your products and services. Some of these short and medium-term objectives can be access to a new market, the launch of a new product, obtaining an increase in the average ticket of users or outperforming competition in sales, among others. Once that you have defined what your objectives are, it will be easier to identify the information that interests you to obtain with price analysis.
2.- Public objective analysis
To be able to find out the market value of products and services it is necessary to analyze how the directed audience is and what price they are willing to pay. At the same time, you sould study what value your items and service give to those potential clients, namely, how they will respond to their needs. Evaluate, if it is a new and necessary product, or, contrarily, if it will have ample competition.
3.- Market price monitorization
Together with the audience, market prices are the second most important factor for performing price analysis. You should know in what price ranges businesses in the sector move within to be able to determine the best prices for your e-commerce. Furthermore, keeping in mind the saturation volume in the market and how this can affect your sales. Un contexto que puedes conocer a partir de un estudio de mercado que incluya el número de empresas del sector, su distribución en el territorio y su facturación anual.
Competition price revision
Within the ample online market, identify what businesses are your direct competition and monitor their prices and promotions. This will allow you to both identify their strategy and localizing possible changes in the demand that you should pay attention to. The most convenient is analyzing as a whole the current and historical prices. With the pricing tool you can evaluate price changes in the competition’s products during a specific time period to facilitate decision making.
As a last step, with all this information you can start to structure your price strategy, your plan of action to achieve the marked objectives. Now that you have gotten to know the market, and supply and demand, you can opt for value-based price strategies, competition-based price strategies, or choose a different tactic for the launch of new products.
These price strategies don’t have to be immovable. On the contrary, they can be adapted to the necessities of the e-commerce to achieve the best results. In the last instance, the importance of this analysis resides in the fact that the price is one of the greatest determining factors in the final purchase decision. Because of that, it is vital to dedicate the necessary time and resources to planning the most adequate strategy. If you have doubts, you can contact pricing experts like Minderest to advise yourself on the whole process.