Every business will have its own pricing strategy which works well for them. Once you figure out what is working for you, you wouldn’t want to change it right? Here’s where you’re wrong! It is advisable to keep adjusting your prices because every aspect of the market fluctuates.
Different aspect like competitors, customer demand, products have a direct influence on the price of your product. Though adjusting prices are advised, changing them frequently can have a positive or negative effect on your prices, which you must keep a watchful eye on.
Adjusting your prices:
Firstly, you must understand that there is no hard and fast rule that you have to keep adjusting your prices all the time. It all depends on the frequency of changes in the market. If you are a small business, you might look into adjusting prices to increase market share. For larger businesses, you don’t have to often adjust the pricing as you would have the experience in hand.
So, when should you adjust your pricing?
Here are a few reasons when it is applicable to change your prices..
Your competition’s prices differ
Sometimes your competitors may be be cashing in slightly less for the same product you have, depending on its features or quality. This is your cue to raise your prices. You can make prominent your product’s most valuable feature when you price it a little higher than others. It gives the customers a good knowledge of the product before they purchase it.
- During inflation
Since inflation is a fluctuating aspect, it is wise to gradually change prices to maintain profitability when the increase is more significant rather than making one quick and high increase.
- Costs increase
It is pretty standard that when the costs for the company increases, it is normal to increase the prices. The prices of raw materials, packaging, labor costs and the like would be adjusted.
These are a few circumstances when you can increase your prices. Now, let’s have a look at when it’s the best time to lower them.
- Competitors reduce their prices
It is quite obvious that when one or more competitors reduce their prices, you have to do the same if you want to remain part of the competition.
- Getting rid of old inventory
When you have new stock coming in and want to get rid of the old stock, automatically you reduce the prices to make way for the new stock. When it comes to the clothing industry, in India winter jackets will not do well in April and to get rid of these old inventories, you can sell these goods at a cheaper rate.
- Costs decrease
When costs go low, decreasing the prices of these products are a good idea. This way you will be more competitive in the market while improving customer perception!
Sometimes there is no need to make any change in the prices of your products. This happens when the larger part of your revenue is not affected by any shift in the market.
Does all the increasing and decreasing in prices overwhelm you? Leave it to the experts then! Our eCommerce pricing specialists can help you plan and execute pricing strategies that keeps your business growing. Since pricing strategies need to have an around the clock check, and you may not have the time for that, we will take care of it for you! Doesn’t that sound exciting? For information on pricing strategies or market intelligence, get in touch with our experts.
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