How to Restrategize Your Pricing Policy to Kick Out Competition
Are you targeting the right price for the right audience? This is a question you should often ask yourself while selling through amazon. Sure, you want to make some profits but you also need to be competitive. These crossroads can put you in a real fix. In this blog, we tell you how you can achieve the perfect blend of competitiveness and profitability.
Amazon Price Tracking
Historical data on your and competitor’s products’ prices is necessary to come up with numbers for your new pricing strategy. You need a price tracking software to accomplish that.
- Historical trends: Prices of amazon products change overtime and it’s important to track trends to formulate future strategies.
- Competitors: Price tracking will also allow you to get to know who your direct and indirect competitors are and what is their pricing strategy.
- Future: Price trends can help you estimate revenue and allow you to divide future costs.
Get the Numbers Straight
You can’t set prices for your products on a whim. You need to make sure all your costs are being covered.
- Expenses: Figure out what your total direct (production) and indirect (support etc.) expenses?
- Breakeven point: What is your breakeven point, or the point where your sales revenue will cover your costs?
- Sales price: Go for a price adequately above your breakeven point – leaving you a satisfactory profit margin.
Keep an Eye on Competitors
Obviously, a competitive marketing strategy will require you to keep track of your competitors and how they’re pricing their products.
- Where you stand: After looking through their prices, decide how your prices fit into the market.
- Adding value: As a small firm, you may find it hard to compete with mass producers on price. So, look for ways to add value to your product without increasing costs.
- Increase profits: Promote these unique features to your customers to increase profitability.
Here are a few textbook techniques you can apply to make your prices more attractive for your customers:
- Charm pricing techniques: They use both a list price and an anchor price. The anchor price is used to make the list price more appealing. For example, $1.99.
- Discounts and offers: Discounted offers always attract customers. The buy one and get one free offer also comes under this category.
- Easy on the eyes: Keep prices simple for customers when promoting them offsite. Go for $1299 instead of $1299.00 or $1,299.
Before finalizing your price, consider your industry’s economics and how it may change over the coming years.
- Market value: Consider the going rate of your product in the industry before finalizing a price.
- Fill market gaps: Look for market gaps and add value to your product without raising prices.
- Rank tracking: If you’re determined to ask for more, then download an amazon rank tracker to discover which products are currently selling well.