How to fix the prices of products in its online store
Tips / / December 19, 2019
Have you ever seen in the stores products with too low prices? Each of us would not mind to save money, but if the product is the price of 1 000 rubles for sale online for just $ 100, then most buyers will think: "What's the catch? It's too good to be true! ". Moreover, many words come to mind, which can be called a death sentence for small businesses: "Apparently, this is a bad product."
Pricing Psychology is composed not only of the simple formula of "cost + profit." Put too high a price, and you will have competitors. Evaluate your product too low, consumers will lose confidence in your product. Imagine that you have just opened their own boutique network and want to capitalize on it as much as possible. Where to start pricing and how not to scare off customers?
Calculate the costs
If you want to make a profit, you need to understand the structure of its operating costs and is mandatory to include them in the price.
You do not have to pay commission or charges for the use of Ecwid. However, online sales, as well as in any other business, there are costs.
Of what are the costs? These can include anything from the cost of the bubble film, in which you wrap it products so they do not damaged on delivery, and to the electricity bills that allow you to sculpt, printing, welding or collect their products.
Here are some costs to keep in mind, setting the price for the goods:
☞ Fees for use of commercial score
Suppose that every time you sell a product, you have to pay for the transaction from 2.2 to 5%, depending on the tariff plan of the company that handles your payments. That is, a maximum of 50 rubles of commodity prices for 1000 rubles will go to the expense of maintenance of your internet business the paying operators.
☞ Advertising Costs
Not all types of advertising are PPC, or "pay per click", but if you choose this option promotion, remember that in some cases it can be quite expensive. Suppose you pay 30 rubles for each click on your ad and clicked 100 people. Your advertising costs account for 3 000 rubles, and you need to earn at least as much to cover them.
☞ The cost of hosting / domain
Consider it, even if it is only 1 000 rubles per year.
☞ Transport
You have to travel a lot, choosing materials? Or every day to get to the studio, where you create your products? Directions - is also an article costs of your business, and it should be taken into account when setting prices.
☞ materials
This category includes T-shirts, on which you put prints, or metals, which are made decorations. And do not forget about such trifles as boxes, tape and fishing line! Most entrepreneurs do not take these charges seriously, which ultimately affects their profits.
☞ Effort
Perhaps until your store is not on his feet, you do not pay his salary. Nevertheless, it is important to assess the value of their work. Do you get enough money for his labors? If you, for example, shote dresses to order to find out how much gets ordinary dressmaker in your area. Three hundred rubles per hour? Does not it too little?
If you are at the same time is a designer, office manager, janitor, executive and chief financial officer of its business (As is usually the case in small companies), make sure that for every job you are doing, just appointed price.
Perform calculations and spread the costs of all goods
Analyze your overhead costs, such as commissions that you pay your payment system. Add them together and divide by the number of products that you plan to sell.
For example, if your operating costs are 15 000 per month and you are going to start selling two product per day (2 × 31 days = 62 Product), then you need to cover the costs will add to the price of each item 242.9 Ruble. Add to this the cost of materials (if you have not considered it before) and the value of your labor.
In some pricing models use this formula:
Materials + labor overheads + opt = × 2 = retail
Some add to this equation profit:
Materials + overhead costs + labor + profit = wholesale retail × 2 =
Of course, you can also define the amount of profit that you want to receive. But do not sell yourself too cheaply! Their expenses can be tracked using special applications or network accounting resources, such as Outright.com.
Analyze your business priorities
☞ Business Plan
No matter what formulas for pricing of products you use. The ideal ratio will always be based on the business plan of your company. How do you imagine your customers? What do they think about the ratio "price - quality" of your products? Do they think your product useful acquisition or beautiful luxury item? If you are a fashion brand, whether your unique products the latest trends?
Pay attention to the comments of its customers, and you will understand how to put the prices of goods.
☞ Watch for competitors
Be sure to watch for the prices of its competitors. If compared with them your goods will be too small, in the eyes of customers, they will look cheap stuff. However, if you are able to offer customers a better deal, then your brand will appear to them more meaningful.
It is important to closely monitor your prices and adjust them if necessary. Stick to the business plan, which contains your target profit, but at the same time make your business flexible enough so that it can promptly respond to any movement of the market.
☞ Be aware of "differentiation factor"
How unique is your product? Experienced entrepreneurs know that the answer to this question may affect the pricing is much stronger than the formula of "cost + profit." For goods that the buyer considers the only one of its kind, he would be willing to pay much more.
Shop online Wishnya - a fine example of the positioning of bright and stylish brand.
If you can effectively show the difference between their products and competitors' products, then you have more chances to install on their high price. This means that the more unique your product (or the more unique you are it is presented), the greater the scope for establishing the price you have. This rule does not work for every business, but still, if you can, try to convince your target audience that your solution best fits her needs and even includes elements that are absent in competitors.
For example, if you shote clothes to order, offer customers services of a personal online stylist who will tell them what the cut is better to choose with a particular type of figure. Small differences from competitors may mean higher profitability in the future.
☞ Observe the "wow factor"
Another pricing component that has more to do with psychology than mathematics - a "wow factor", or fashion factor. For example, Apple has released smartphones just like hundreds of other businesses. However, they have managed to stand out from the mass of competitors not only due to its own operating system and product quality, but also due to the positioning of its products as a fashionable gadget attribute high standard of living.
It was the fashion factor allows them to charge premium prices (the highest on the market), even though their smart phones are made of the same components as that of all the others.
So, remember that people are willing to pay more for products that are:
- or luxurious quality;
- fashion;
- rare;
- unique.
Successful sales!