Ecommerce Web Design Blog

Whether you are selling online or offline, pricing your products is a key part of doing business.  What methods can you use to price your online products? Here are a few tips you may wish to consider.

Some common methods to price products include:

• Cost-based pricing (also called cost-plus pricing. this is the price that you paid for an item plus a mark-up)
• Market-based pricing (what your competition is selling items at)
• Value-based pricing (what your customers value your products at. You may apply a premium to reflect your brand, to depict quality or the value of your product in the marketplace)

In practice, the price you place on your products will often depend on a combination of the techniques above.  There are also many different strategies that you can use to price products depending on your objectives in the market.

For example, if you are a new business online you might run an introductory sale, you may have some products of popular items priced equal or below the competition to get people to your store and other products priced using value or cost-based pricing. 

Some  online businesses also use a technique called a loss leader of pricing one product below cost to match or better competition, to get people into your online store and looking around. If they buy that item and you can cross-sell it with others, you could build up a sizeable cart and make a profit overall, even if one item is sold at a loss. 

Whatever you do, make sure you look at the prices of your products as a whole and not only individually, as it will depend on your competitors, your products, your shopping cart website, your advertising and your brand as to whether customers will be prepared to pay your prices.

For a wary online consumer, one way to assess whether an ecommerce website is safe and secure to purchase from is to look at whether the site is kept up-to-date.

A well designed website that has a good selection of products, an easy-to-use checkout system, an active newsletter and is obviously well maintained is more likely to inspire confidence in the buyer that the products they order from you will be of high quality and actually get delivered to them.  Keeping your shopping cart website up-to-date by reflecting seasons and events (such as Christmas, Chinese New Year, Valentines, Easter,  etc) and sending out a regular newsletter to your subscribers/customers can therefore be a big influencer in whether your customers keep buying from you.

At the start of each year, mark on a calendar or in your online diary your planned promotions, events and seasonal messages for the year.  Allow your sales,  promotions or seasonal messages to run for at least two weeks prior to each event to allow people to find you and buy from you during your sale period.  For big sales, you may need to run them for four weeks to get maximum benefit. Each promotion will depend on the time of year, what you sell and your industry - there is no set formula.  Also, make sure you stay aware of what your competitors are doing as they will probably be keeping track of you.