- It affects your business from the very first step
You have to consider price much before you launch. In fact, you should be looking at price before you start sourcing your product. Your price will determine what type of customers you attract. Are you looking for bargain hunters? Luxury buyers? What segment are your competitors targeting? If most of your competitors are targeting luxury buyers, you can try to offer a similar version of the product at a much cheaper price for the bargain hunters. This affects your sourcing because the market you decide to attract and the price point you set will determine what your products will and won’t include. Maybe you have simpler designs or matte colors for products that are for bargain hunters and more intricate designs and different materials.
- Don’t start with the lowest price
Many sellers want to launch their product at the lowest possible rate, some not even breaking even just to get sales up. It may seem counter-intuitive but you want your starting price to be as close to your ideal price range as possible. Pricing is not a decision you should make on a whim especially on Amazon. Once you set your initial price, you have to increase it very slowly, you can’t shoot up your price immediately after your launch success. Firstly, it will isolate your customers from coming back because you’re not at an attractive price point anymore. Secondly, you will lose the Buy Box on Amazon even if you’re the only one selling your product (Private Label). This will reduce your overall conversions.
- Pricing can be a marketing strategy
Whether your product ends with 99 or with 00 does make a difference. Using pricing psychology, you can work out the best number that will attract customers to your page and possibly to purchase your product as well. A good strategy is to always keep your price and discounts comprehensive. Doing a 15% discount on a product that $159 is not easy enough to calculate. Even if the price is extraordinary, if it’s not presented in a way that’s easy to calculate the total price, you can lose your customer’s interest. Dive deep into the marketing strategies at Global Sources Summit with speaker Paulina Masson.
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- Price matching
If you’re already ranked second in your product category, the best strategy may be to match your competitor’s price exactly, even if their pricing isn’t comprehensive, rather than dropping your price. By doing this, you are taking the price of your product completely out of the equation and allowing customers to focus solely on the product and listing. If price were in the equation in this case, your customer may wonder what the worth is and why there’s a difference in price. The better the listing, the more likely you will win against your competitor by keeping your price on the same level. Learn the Formula for the Perfect Product Listing on Amazon at Global Sources Summit.
- Aim for more than 3%
How do you find out if your strategies are working? Keep track of how many sessions you’re getting (find this in business reports on Seller Central) for a few weeks and find out if there’s a significant increase. A significant increase differs based on the velocity you’re selling but anything more than 3% usually points to a significant enough change to attribute to your change in strategy. Anything less than 3% could just be fluke or caused by seasonality.
Meet Paulina Masson at Global Sources Summit
Paulina is a software developer and a serial entrepreneur. 3 years of selling on Amazon and 3 years of running a profit dashboard for Amazon sellers gave her an in-depth understanding of what makes a business profitable. Paulina’s talks are always full of actionable tips, walkthroughs with screenshots and step by step instructions. She believes that most people enjoy clear visual action items, with useful takeaways they can immediately apply to their business. Her favourite topics are cost optimization and pricing strategies. She is the founder of Shopkeeper – a profit dashboard for Amazon sellers.
What is Global Sources Summit
Global Sources Summit is a 3-day conference for online and Amazon sellers sourcing private label products from China. The conference will be held 27-29 October 2019 in Hong Kong.
The Summit is co-located with Global Sources Fashion and Lifestyle trade show so you can also meet thousands of China suppliers at the same time.
Use the code SS100 for US$100 off