In today’s day and age, a thousand things are happening in a random online store. From product publishing to its representation to the checkout process, there are many things for the website owner to go through. One of the things that you get to know about an online store is how to price a product. In today’s day and age, product prices have become extremely important. When the world is suffering from increasing inflation, the prices must be calculated before being finalized on an eCommerce website.
Gone are the days when you just had to rely on a physical store to determine the welfare of your business. Nowadays, an eCommerce website is equally as important for a business. As the online products cannot be sensed or touched by the visitors, the eCommerce website must provide them with quality descriptions, prices, and images to consider them trustworthy and good enough to buy. They would demand perfection from a product if its cost is high.
Best Pricing Strategies
1. Cost-Plus Pricing
When you understand how to price a product, one thing that gets notified is the number of overhead costs associated with an eCommerce product. This product pricing strategy is calculated by adding the cost values and dividing them by the volume to create a unit break-even figure. You must have a margin in your product costs or simply a mark-up in the break-even point of your pricing section. We classify this as a percentage of our break-even figure.
When we talk about the mark-up level, certain factors play a part in their determination, such as the industry analysis, market awareness, and previous working experience. Regardless of what products you have published, it is always difficult to determine the right prices if you haven’t worked previously with an online store. The beginners are bound to make mistakes in the pricing of eCommerce products. If the prices look high, you can reduce them per the customer’s expectations
2. Subscription-Based Pricing
In the last few years, subscription-based pricing has become a trend in the eCommerce industry. For example, suppose you are trying to understand how to price a product. In that case, you will understand that this pricing technique will help you receive regular payments from your customers over a certain period. When you determine the price of a product through this strategy, it will secure membership for many years. If you use the eCommerce products of a particular company, it will result in an increase in the company’s brand value and a decrease in its overall costs.
Image taken from Strikingly
Subscription-based pricing draws comparisons with the paid membership offered by the Strikingly platform. If you create a professional website on Strikingly, it can give you an external source of income. If you create a membership status through your Strikingly website, you will make your customers aware of all the features they will get after acquiring the membership status. For example, they can be informed about the paid-only features when they get the membership.
3. Freemium Pricing
If you go through the name of this product pricing strategy i.e. Freemium, you would understand that it is a combination of two words, free and premium. If you want to know how to price a product through this technique. In this technique, the website owner provides its customers with a basic version of an eCommerce product. They provide it with the hope of upgrading their membership status to access more features.
Image taken from Strikingly
SaaS is strongly connected with this pricing technique because if a member has restricted features, there is no reason why he won’t go for the full version. However, they don’t improve their subscription plans before building trust within the software. Once you complete the registration on Strikingly, you will be part of our free plan. On our free plan, you can afford to create a basic website. However, if you upgrade your subscription plans, you will see advanced features becoming part of your website.
Tips to Improve Pricing Plans
1. Pricing Ambitions
For anyone involved in eCommerce, it is important to have clear pricing ambitions. Before you understand how to price a product, you can ask yourself the following questions
What are your pricing objectives?
What is your team’s opinion regarding how you will sell online products?
How can you convince your customers to approach only your website regarding eCommerce products?
You cannot even consider finalizing the prices if you don’t have an appropriate plan. For example, if you are selling a Wilson 2022 tennis racket, you would definitely put a high price on it because the product was launched in 2022. However, you cannot expect to have the same strategy for a tennis racket launched in 2012. This allows the early adopters to pay the amount and get their hands on the exclusive product. However, if you put a low price tag on it, you can build your market share.
2. Competitor Analysis
If you are struggling with how to price your product, you can look at your competitors. You must look into the experienced customers rather than those who have just started getting used to professional life as they are bound to make mistakes. For example, if you want to sell a new mobile phone, you can look into your competitor's mobile shops and the prices they allotted on the same mobile module.
Competitor analysis is extremely important for understanding how to price a product. For example, if your competitors have provided discounts on the first order or certain products, you can adopt the same strategy. When we talk about competitor analysis, we don’t mean to say that you must copy the entire strategy that your competitors have used. However, you must look into how they have increased their online sales, and you, for some reason, haven’t been able to.
3. Variable Costs.
If you understand how to price a product, you first need to understand the influence of variable costs. When you order a product, you get a detailed overview of the cost of each unit, also known as the cost of products sold. If you are responsible for building your products, you must also do further analysis and look into your raw materials, labor costs, overhead costs, etc.
4. Fixed Costs
Once you are done with the variable costs, the next thing to consider while understanding how to price a product is the inclusion of the profit factor. If you include profit margins in your pricing strategy, you will make the most of your online business. When you choose a certain percentage of your profit margin, you must look into the following factors:
You haven’t mentioned your fixed costs as yet, so your work isn’t completed after just finalizing your variable costs
Conduct market research and finalize a price tag that is acceptable within the market
Pricing Products on Strikingly Website
When we talk about the eCommerce world, you don’t need to look any further than Strikingly. We provide you with all the necessities to produce an effective eCommerce website, where you can implement the strategies of how to price a product. Firstly, you must complete the registration process, so we can get all the critical details related to you. Once you complete the registration process, you will be eligible to create an eCommerce website, where you can set the price for your products.
Image taken from Strikingly
If you want to set prices on your Strikingly website, you must go through the following steps:
Open your account, and click “Build my Store” to get things started
Identify the best website template for your eCommerce website out of our provided collection
Customize the selected website template and click on “Add New Product”
Enter all the important data related to your website, such as product image, description, product price, product title, product type, etc.
Once you add all the critical details, you can publish your added product
If you think that a physical store is enough to make the most out of your online business, you couldn’t be more wrong. You must have an eCommerce website to implement all the strategies of how to price a product. Many website developers feel that customers only get inclined by the website interface. However, the reality is that product prices also play a role in their buying decisions.
When a customer comes to an eCommerce website, he either wants to buy a product or attain information related to a product. Therefore, you must put first things first and implement the relevant pricing strategies for your products. As for the website builder, you don’t need to look any further. Here at Strikingly, we provide you with all the necessary features for website development. If you have any troubles related to web development, you can contact our Happiness Officers today. So, create the best eCommerce website and implement relevant pricing strategies to satisfy your customers.