17 Nov How online shops can profit from business opportunities?
New business opportunities arise every single day for online retailers. And guess what- a lot of online shops are not even aware of them! In this article, we will focus on why it’s worthy to track prices of your competitors, how to use pricing intelligence to find new market opportunities and how to set prices in your online shop to maximize sales and profits.
Price monitoring is a must
E-tailers are working in a highly challenging environment due to increased price transparency. This creates the need for valuable insights and precise actions. It requires following such information as market trends, MAP violations, private brands and characteristics of particular products and categories. However, the volume of data produced in e-commerce is so vast and volatile that it’s impossible to process all available information in a conventional way. A professional tool is required to create and implement the right pricing strategy that will help you to achieve defined goals such as sales increase, getting rid of unsold inventory, etc.
How to increase profit margins?
Setting the right price can be tough- if it’s too high, it results in lost conversion, if it’s too low – it means lost margins. What’s more together with product online maturity, the price transparency is higher and the the pricing target range is narrower. Regular observation of market situation is the key to get the price strategy right.
How to act on the information we get prom price intelligence solution? Let’s have a look at few popular scenarios:
SCENARIO 1: Your offer the lowest price on the market and the price difference between your offer and your competitors’ offer is high.
In such a case, you can increase slightly the price and the product will remain the cheapest anyway. This method will help you to increase your margin.
SCENARIO 2: You are an exclusive seller of the product at the moment.
This way you can dictate the price. Raise prices to maximize your margins.
SCENARIO 3: You are the only one who has the product in stock at the moment while your competitors have problems with product availability.
You can increase prices to maximize margins for customers who value product availability more than lower price.
How to increase sales?
You can also use other tricks to increase sales conversion rate. Have a look at two other cases:
SCENARIO 1: Sometimes the difference between your offer is so small that you can decrease it slightly to go to the top.
This way you can attract more clients to your store and increase sales. Decrease slightly the prices and become a leader.
SCENARIO 2: If you noticed, you have some popular products, you can attract customers lowering their price.
Try to decrease prices of popular products and suggest the purchase of other complementary goods with higher margin.
What else can be done?