How To Avoid Choosing The Wrong Pricing Strategy

Professional pricing of products is usually a demanding process, which is why many companies practice cost-plus pricing. This pricing method only adds a percentage of profit to the costs of manufacturing products. However, simple pricing strategies can be dangerous. Demand is not included in the price, so you cannot know if customers would buy your products at the calculated price. A virtual shop simply cannot be run this “simple” way.

Suppose you have a shop which sells heaters and you need pricing for a certain gas-fuelled model. Competition-based pricing translates in three main questions. Firstly, if you decide to sell your gas-fuelled heaters cheaper, how many new customers for your gas-fuelled heaters would you have? Secondly, how many such heaters will you have to sell at a certain price, before you can change the price without losing clients? And thirdly, how much cheaper would you have to sell your gas-fuelled heaters, if the price of gas goes up? By combining these factors, you determine the distinctiveness of your gas-fuelled heaters on the market, which is expressed in your price.

Market-oriented pricing, price discrimination, contribution margin-based pricing, target pricing or dynamic pricing, to name several pricing strategies, are by no means simple either. So, how long do you think it takes to determine the right strategies for all the products that you hoped to sell online?

The answer is: several minutes, if you start using marketing intelligence software. Simplicity online means inspired automation. The basic software package performs automated price comparison. The lighter version compares many of your products against the prices of many competitors in several minutes. The full package allows for unlimited entries.

The advanced package analyzes different data from multiple angles in just as little time. It supplies different users with simple and clear presentations, through an interactive dashboard. You can customize the reports according to specific priorities and business requirements, and the suite will monitor in-depth information concerning your key competitors.

The software also has optional features to maximize your competitive advantage. It can source, price and sell thousands of products automatically to enlarge your market share. With all your suppliers displayed in one place, you will handle numerous suppliers and products successfully. Price automation means hundreds of thousands of goods literally pricing themselves in your best interest. The software applies dynamic business optimization rules that protect your competitive position and margin. When price tolerances are at risk, you will be alerted. As for the wrong pricing strategies and human errors in your calculations… they simply belong to the past.

By: JacquelineBrewster

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