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The Impact of Pricing on eCommerce Sales

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Pricing on eCommerce sales is an important aspect which can turn visitors into customers. If the customer feels that the product on offer is priced higher or doesn’t meet the required satisfaction of what they are looking for, chances are they will switch to another online store for the same/similar product. Pricing on eCommerce sales is often the breaking point that influences the customer to purchase from you.

Having a well thought out pricing strategy distributed across the product line will help your business gain a competitive edge over the others and in turn increase sales. Since the online marketplace is interconnected people can compare multiple prices simultaneously. If you have a bad pricing structure, it is certain that customers will navigate to other eCommerce stores that offer better pricing. 

Hence pricing on eCommerce sales becomes the defining factor to stay competitive in the market. This can be done by creating a clear pricing strategy and continually monitoring them to adjust accordingly. As an eCommerce business owner you get customers from all parts of the world. Your major customer demographic might be from a country that has a higher per capita income than yours. In cases like this, you can increase your price to meet your customer’s buying capacity. If it is the other way around, you have to reduce the price or provide a cheaper price for bulk buying or free shipping, to make your pricing the best choice for your dominant demographic customers.

There are challenges when it comes to pricing on eCommerce sales and this could vary from shipping price, taxes, availability, shipping duration etc. that would make customers steer away from your store. It is always a wise decision to study your competitors to better understand what you are lacking and what you can improve to increase your sales.

Common Mistakes in Pricing on eCommerce Sales

Overpricing products

In eCommerce sales, overpricing is one of the biggest mistakes that anyone can make. Customers have the absolute power in the online business landscape. Internet shopping is different from shopping in-store, unlike physical stores online shopping allows you to compare pricing in real-time from hundreds of stores and place orders right away. If a customer finds a better price for the same product elsewhere, they will buy the product from there.

The only time overpricing a product will garner sales is when you have something to offer that is absolutely not available anywhere else and the customer has no option but to purchase from you. This scenario is very unlikely to happen. By overpricing products your business clearly sends a message that makes existing customers leave while also putting an end to the flow of new customers.

Online shopping customers have two reasons why they choose online shopping over in-store shopping; price and convenience. If you over priced products on your eCommerce store, then you give no reason to purchase from your store. Your customers will eventually lose trust in your store and eventually stop buying from you. 

Before you decide on pricing on eCommerce sales, do a thorough research on the pricings provided by competitor websites. You will get a better clarity on how to price products on your own eCommerce store. Give a reason for your customers to buy from you over the competitor. You can also implement conversion rate optimization on your online store to get a better insight on your audiences. Once you gather all the data, you will be able to understand the spending power of your target audience and price your products accordingly.

Underpricing products

After reading about overpricing products, you might think that underpricing will rake you sales. But that is not the case. It is a great strategy to create the initial buzz to gain customers, but it is only a short term strategy. In the long run, underpricing will run your finances dry. Your customers are wired to know what is a good price for a product and they can sense if a product is overpriced or underpriced. An underpriced product has low quality written all over it and customers will skip from buying it. Unless you have a physical store to prove them wrong, but in this case we are talking about only eCommerce sales.

Dependability and reliability of a product is often questioned when you price your products too low and this might damage the reputation of the brand.  Underpriced products with reliability questions from customers will surely be the death of your eCommerce sales. That is why you should price your products in a way that they don’t cut into your profits. Meanwhile, you can run frequent sales and offers to keep customers engaged with your online store.

By comparing prices with your competitor website, you will have the idea of the best average price a particular product sells. Sell your products at the same price, but you can add perks that are not offered by your competitors like free shipping, earning points, free complimentary products etc. Doing these will make your brand build trust with customers and increase sales. 

Even when a customer does compare your pricing with all the other competitor pricing on the online marketplace, they won’t have any reason to choose another online store over yours.

Not offering sales or discounts

If there is one thing that gets your customers excited then that is sales and discounts. Customers love a good discount, in fact they will boast about it for the rest of their life. When you market to your target demographic customer about an upcoming sale, it sure will be a winner. Saving money is always there in the minds of the customer and when a discount shows up on a silver platter they will take quick action.

From a business owner’s perspective, sales or discounts only give a narrow margin of profit. So why should you as a business owner provide discounts in the first place? There are plenty of businesses out there who never provide discounts in order to maintain their brand image and not be considered a discount store. However, having sales and discounts are an important aspect to create a sense of excitement for existing customers while also attracting new customers to your online store.

The decision for implementing sales and discount on eCommerce sales is solely your business choice. You have to know about your target consumers, the business landscape and should also be timed with your business strategy. Once you decide on running a sale or a discount, make sure you invest in marketing it so that more people know about it and will visit your eCommerce store to make the purchase.

Sales are a great way to clear old inventory and make space for new inventory. Often clearance sales are done as a final sale on products that no longer sells. Based on your pricing strategy for your online store, you might as well pull off a great sale session without cutting too deep into your profit margin. At the end of the day, customers will buy more products from you because your business helped them save money once.

How to Optimize Pricing

ECommerce sales are defined by pricing. The online store that offers the best bang for the buck wins the customer. That is why pricing is considered to be an important aspect for the survival of an eCommerce store. Offering products at a competitive rate is a solution to keep your online store from drowning.

The best way to understand how to price your products in a fair price range is to conduct market research. Market research helps you to understand the varying factors including your target audience and demography, all the competitors of your business, various pricing and sales that are happening for the same product/service that you are offering at your business. Good market research data will help you further understand how you should price your product or service in order to increase your sales.

Pricing should not be taken lightly as this could make or break your business from the beginning. Price something too high and you will drive away your potential customers as well as lose existing customers. Price something too low and you will be considered a cheap brand/product all the while eating into your profit. Hence it is crucial that your pricing should strike the right chord with your customers.

With market research and price optimization, you will attract more customers and retain all your existing customers. The success of your eCommerce venture balances on the way you price your product. Pricing also builds your brand in comparison to your competitors, you can craft it in a way to showcase as a luxury brand or an affordable one. Be aware of your geographical location when you decide to do it, based on where you manufacture will also affect pricing.

eCommerce Sales and Discounts

While pricing is an important factor, providing sales and discounts should also be on the plate. Discounts often hype up the interactions and purchases on your eCommerce store. If you feel like your business has been slow even after a competitive pricing structure, then it’s a good sign to run a quick sale to boost the engagement and interaction to your eCommerce store.

You have to be cautious while running a discount or promotion. Offering too many discounts will affect your healthy margin of profit and make the customers feel that the product or service is not a good deal. All the discounts and sales should be planned properly so that you don’t overwhelm customers with cheap prices. 

Running discounts on the holiday season is an effective way to bring in more sales. Consumers generally spend the highest during holiday seasons to buy gifts for others and good promotions always catch their eyes. There are certain days like Black Friday and Cyber Monday that occur once in a year around the holiday season that get the highest turnaround of customers at stores.

Personalized discounts for regular customers are a great way to retain existing customers and a sure way to gain more sales. Another thing that is popular with regular customers are loyalty points. With loyalty points, your customers will gain points every time they make a purchase from your store and then later redeem these points to make free purchases.

For all the slow moving products or discontinued inventory, you can run a clearance sale with a considerable amount of discount. The only catch for the customers will be that it is a final sale and cannot be returned. This method is more for clearing existing inventory to restock on new products rather than making a huge profit.

eCommerce sales and discounts should be something you have to include in your sales strategy. With this you can be rest assured that customers don’t lose the excitement for your brand/product. 

Dynamic Pricing on eCommerce Sales

Economy is sometimes unpredictable. What might be in demand today will not be popular the next day. Keeping an eye out on these trends is very helpful for businesses. Based on these trends your business can adopt dynamic pricing strategy. In this method you can price in-demand products higher whereas reduce the price on products that are not in demand at the moment. 

Automotive sales are often known to over utilize this technique by marking up the price too high for models that are in-demand. This often creates setbacks with customer relationships. This is an example of over utilizing dynamic pricing, but when it’s done right it will not affect your eCommerce sales. 

Increasing prices drastically during peak sales season is not recommended, if you plan on doing dynamic pricing, be sure to compare with your competitors. If you end up being the only one increasing price, then customers will lose trust in your establishment. Dynamic pricing requires a considerable amount of research. This includes analysis of market trends, customer behavior and competitor pricing.  But if done right, you will have improved sales with higher profits during peak season.

Dynamic pricing should align with your brand positioning in the market. If your brand positioning is in the luxury category, you markup the price more than a cheaper brand. At the end of the day customers shouldn’t feel like you are using the demand as a means to loot money. Whatever the demand may be, a customer can always say no and find alternatives.

eCommerce Sales


The impact of pricing on eCommerce sales is something that a lot of business owners fail to realize until it’s too late. Consumers have the upper hand in the online marketplace, where they can compare prices with hundreds of sellers like yourself. As a result, you as a business owner should also compare your pricing strategy with your competitors so that you will know how to better price your products and increase sales.

Pricings on eCommerce sales influences customer interaction with a store. Right pricing will help you attract more customers while retaining your existing customers. Pricing does not always mean lowering your price, utilize dynamic pricing during the peak season, provide discounts in order to sustain and grow your business.

At the core of all the pricing is processing these when customers make online purchases. Implement a robust online payment solution for a smooth transaction journey for your customer. With RapidCents online payment gateway you can be rest assured that all your transactions go through without any glitches. Learn more about our online payment solution here.

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