E-commerce product pricing guide!

The pricing of e-commerce products is very critical. If the pricing is too high, it will not attract traffic, and thus it will not be possible to achieve sales targets, conversions and transactions; if the pricing is too low, it will not be possible to achieve profit targets, or even make a profit. In a highly competitive market, even the slightest difference in commodity prices can produce completely different effects.

Regarding product pricing, we have adopted different pricing strategies based on different sales scenarios, namely, new product price, promotional price, and clearance price.

New product pricing strategy

New models are priced primarily by calculating the cost of goods and increasing the price to create a profit. His calculation formula is: price = cost + expected profit.

Commodity cost calculation table

Therefore, based on this pricing strategy, the focus is on cost accounting. We take into account purchasing costs, freight, labor costs, fixed costs, marketing costs, etc. into the cost of goods, so as to calculate the real cost data.

The specific approach is to list all the cost expenditure items of the business and make a dynamic calculation table, which can clearly show the net profit and net profit margin of each single product.

Pricing based on product category

For new models, choose the appropriate pricing range based on the product category itself, and determine the corresponding pricing multiplier based on the positioning of the style in the store (traffic-generating style, profit-making style, brand style).

Pricing adjustment strategy after new models are launched.

Comprehensively analyze the sales of new products based on data such as the add-to-cart rate, conversion rate, sales volume, etc., and make targeted price adjustments.

Pricing strategy for promotional prices

Pricing of new products on sale

The new model pricing includes 4 types of prices, namely daily price, activity price, big sale price and new price.

The daily price is the normal selling price of the goods on weekdays; the event price is the discount price of the goods during daily events; the big sale price is the price of the goods with a big discount during major event nodes (6.18, Double Eleven); the new price is the promotional price of the goods when they are first launched.

In order to ensure that unsold goods can be sold through discounts during the new product stage and reduce the risk of the first order of the goods, it is necessary to give the goods a relatively large discount so that they can be sold quickly. During the big sale, the price of the goods should not be lower than the historical lowest price, so we usually set the big sale price and the new price to be the same. The promotional price is a discount for daily activities, so the discount will be smaller than that for big promotions.

The pricing of the promotional prices of the goods on sale.

① The different stages of a single product: introduction, maturity and decline.

②Intensity of activities.

③ Product inventory status

In this way, the discount rate of promotional items can be flexibly adjusted.

Price adjustment strategy for end-of-season clearance

At the end of each category season, take inventory of products with high inventory in seasonal categories and develop an omni-channel clearance plan to reduce the risk of leftover orders.

When the inventory of goods is large and the sales volume is low, a large discount and price reduction strategy should be adopted to avoid a large inventory backlog.

When the inventory of a product is small and sales are low, you can adopt appropriate discounts and price reductions, and digest the inventory through activities.

Note: There is no need to reduce the price too much at one time. Instead, adjust the price in stages and you can reduce the price in stages through multiple activities within a month.

Summary: This article is the 2.0 version of the previous one: How to price e-commerce products. The main optimization is to refine the language, delete some nonsense, and supplement some commonly used ideas in work.

Author: Adult Xiaofan

Source: Xiaofan18s (ID: xiaofan18s)