Pricing can make or break your business and should always be handled with care.
Start by developing a product pricing strategy. Doing extensive price comparison work is one way to keep ahead of your competition.
The price listed on MoreCommerce (the “everyday value”) should match your lowest price anywhere on the Internet. Why? Shoppers are smart, and they can compare prices from other retail channels with a quick internet search.
When pricing your goods, be sure to Include your product’s MSRP if it retails for a higher price elsewhere so customers can see the great value they are getting at checkout.
Who is your market?
Start by understanding your target market. Research your target customers' demographics and purchasing power. Is your product designed for sale in a mass or luxury market? How much does your audience spend, and how frequently do they shop, for products like yours?
Understand your products' perceived value.
Ask yourself "what is the perceived value of my product in the eyes of my customers?" Then, adjust your pricing accordingly. Sometimes customers associate low prices with low quality, so don't blindly lower your prices in the hope of generating more sales.
Know the market demand.
How many people want what you're selling? If market demand is low and your supply is high, then your goods' retail prices will be lower, but if market demand is high and supply is low, then you can safely raise your prices.
Consider the competition.
Who else is selling products like yours? Unless you're the only merchant making and selling your product you must look at the competition.
Be sure to make a detailed analysis of how similar merchants price their products and see how you measure up. Is your product an equivalent of theirs, or are you offering a more luxurious or economical model? Are there clear reasons why a consumer would pay more for your version?
What did it cost you?
Always take into account your total production cost for your product. In addition to the material and manufacturing cost for each piece, consider:
- What were your upfront investments, including research & development?
- What are your ongoing operating costs, such as marketing and administrative costs?
It takes a lot to bring a unique product to market, so make sure you're selling a profitable product and building a profitable business!