The consumer is a complex being, and different kinds of consumers react to different prices the same way. There’s the target demographic to consider, the market, the competition, the sales volume, and much more. With the right tools such as repricing software, you can even win the Amazon buy box and eventually become a top seller.Here’s how best to stay competitive on Amazon with the right re-pricing system.
Pricing is dynamic
If you ever need proof that pricing and re-pricing can be a very strange and dynamic system, all you have to do is take a look at the airline and the hotel industry; their strategies often boggle the mind. On one particular day, you’ll find deals that make you wonder how the business can survive with such cheap prices, whilst a week later you’ll find that the price has shot through the roof. It’s dynamic, based on marketing, and believe it or not, there’s a strategy behind it.
Price is important
To give you an idea of how important price actually is in the e-commerce industry, here are some staggering statistics:
- 90 per cent of online shoppers actually go hunting for price differences and good deals
- 60 per cent of online shoppers claim that price is the most important factor for their decisions
- 20 per cent of online shoppers are referred to sites by online price comparison sites.
This is the simplest approach – but not necessarily the most effective one.
Examining the consumer
It’s crucial that you understand who your customer is, and what the customer wants. Is the customer very conscious about price, or is it more value that he or she is after? What about brand recognition? Would they be willing to pay more if you are connected to eco-friendly initiatives or charitable organisations? Knowing your target audience gives you a great edge.
Examining the market
Of course, you have to check out your competition. What deals do they have? How do you counter them?
The price you place on your product or service should never be the result of making a few simple calculations. Rather, it should be the result of decisions made based on a holistic and broad understanding of all factors that can influence price – the cost, the customer, the market and the company goals. And remember this: pricing and re-pricing is something that never stops; it’s a process that’s repeated regularly to adjust to new conditions. It’s an important and dynamic marketing concept.