It’s common for someone to buy a product after first doing a quick price comparison online. We want to ensure we’re getting the best deal, so we compare prices before purchasing. The only thing that sets these websites apart is their prices when the products are precisely the same. It’s no surprise that a whopping 85% of consumers do their research online before making an online purchase. So, let’s check online retailers’ most common pricing mistakes!
Not Tracking Competitors
As the first common pricing mistake, many online retailers do not track their competitors’ prices. This often leads to them charging excessively high prices for their products, causing potential customers to look elsewhere. This is particularly true during seasonal sales when most online stores offer discounts. Merely assuming that one’s products will go on sale is not enough to attract customers. Let’s consider a scenario where five online stores sell sneakers, four of which track their competitors’ prices, while one does not.
Assuming that some competitor stores have similar prices, the store that does not track its competitors’ prices will be left behind in the competition by setting a totally different price.
Ignoring Customer Feedback and Market Trends
Another common pricing mistake is disregarding customer feedback and market trends. Your customers’ opinions and market conditions can change rapidly, and you need to adapt to keep your pricing strategy updated. Online sellers must closely monitor market trends, consumer behavior, and industry developments. Adapting your pricing strategy to align with emerging trends can give you a competitive edge.
Neglecting Shipping and Extra Costs
Online shoppers often consider the product price, shipping costs, and additional fees. Neglecting to consider these factors when setting your prices can lead to abandoned shopping carts and unhappy customers. Here’s how to avoid this pricing mistake:
One solution is clearly communicating all associated costs, including shipping, taxes, and additional fees. Customers appreciate transparency and are more likely to complete their purchases if they know the total cost upfront.
The second is to offer competitive and flexible shipping options. Free or cheaper shipping can be an incentive to attract and retain customers.
Setting Prices Based Solely on Cost
Pricing products solely based on your costs can be a critical pricing mistake. While you must ensure profitability, setting prices without considering the perceived value, demand, or what your competitors are offering can result in missed opportunities.
Also, consider a value-based pricing strategy that factors in the perceived value of your products to your customers. This can allow you to charge higher prices for products that offer unique features or superior quality.
Avoiding common pricing mistakes is essential for the success of online retailers. Regularly monitoring competitors’ prices, adapting to market trends, considering additional costs, and using a value-based approach are key strategies to ensure your online store remains competitive and profitable. Finally, by taking a proactive approach to pricing, you can guarantee more target customers and stay competitive in ecommerce.