Before we start the process of pricing products for e-commerce, we must talk about the elements that influence the process. Only then will we be able to think about the planning and execution of pricing.
Persona
Knowing your target audience is an essential part of any business, and the pricing stage is no different. Your company nes to have a study that clearly identifies who you want to sell to, otherwise you won’t know what the price of the product should be.
“Expensive” and “cheap” are abstract concepts that are job function email list construct from the perspective of the viewer. Whether your customer will find your item cheap or expensive depends on the economic class you are trying to sell to.
For a certain type of person, a T-shirt costing R$100.00 may be seen as exorbitant. However, these people are not looking for high-quality fabrics or elaborate prints; they are simply looking for simple clothing items.
However, if the public appreciates products that come with greater durability, or more fashionable details, the price is consider completely acceptable.
It will all depend on what your persona is looking for and how much they can pay.
Fix expenses
Every company has a series of expenses that they know they will technical aspects always receive at the end of each month, and these are what we commonly call fix expenses .
During the process of pricing products in a physical store, fix expenses such as electricity and water bills, employee payments, among others, would be consider.
In your case, where you are trying to price products for e-commerce , fix costs include things like product acquisition, storage, transportation, etc. All of this should cover a percentage of your sales value.
Variable expenses
Variable expenses can be defin mainly as small unforeseen events or recurring situations, but which are not fix expenses, such as tax increases, maintenance, among many others.
A certain percentage of your sales value will also have to cover these expenses that are not part of the forecast. Only in this way will your company be able to avoid losses in the event of an unforeseen situation.
Have you ever stopp to think what it would be like if all companies australia database directory rais their prices whenever any small unforeseen event occurr to avoid losing capital? The market would be in total chaos, so these values should already be includ in the cost of your product.
Profit margin
Your business’s profit margin should be pre-establish bas on everything you offer your customer. There is no standard for defining the percentage you want to receive, however there are some precautions that can be taken.
The first thing to do is not to set an unrealistic price that your persona won’t be able to cover. It’s very important to keep in mind how much your future client can and wants to spend. Also take into account the expenses that the sales price will have to cover, so that you don’t let the prices pile up.
Competition
There is something you should always keep in mind: supply has never been as great as demand as it is today. This means that there are several competitors with the same persona as you who are already in the market trying to attract new customers.
Add value
Have you ever heard of add value? This phenomenon is quite simple and can be explain with everyday situations.
Let’s talk about the electronics market. In Brazil, the iPhone stands out for being one of the most expensive smartphones, however it is still widely purchas by the population, and not just by those with greater purchasing power.