One of the biggest problems small eCommerce businesses in America face is setting up the right marketing pricing strategies for their offer. That’s also one of the main reasons why these companies aren’t maximizing their profits, leaving some of them with less than twenty-five thousand US dollars in annual revenue.

Knowing the complexity of the process of price determination, this isn’t a huge surprise. Having in mind that you need to think about:

• Production and distribution costs;
• Competitor offers;
• The spending range of your perfect buyer’s persona;
• Your position on the market;

… among other things, it may seem impossible to pick the perfect marketing pricing strategy for your product.

This task may seem even more challenging if you’re a one-man operation or a startup trying to penetrate on the competitive market. That’s why we’ve tried to pick five marketing pricing strategies from which you can choose, and surely one of them will be a perfect fit for your business.

Premium Pricing

You believe your product offers a unique value to your potential buyers and that nobody else on the market is anywhere close. That’s great, but the tricky part is to present the added value to your audience.

People will pay a higher price for a product or service if they believe it’s the best thing they can find on the market.

Shut up and take my money = Premium Pricing

When you go with premium pricing, you should also consider including some finesse into the whole marketing mix that will work together with the unique value you offer. Some of the stuff small eCommerce companies work on when using premium pricing include:

• Product customization
• Product packaging
• Store décor
• Creating a story around the product

Market Penetration Pricing

Having a product that offers a unique value gives you a certain edge over your direct competition, but not all of us are so lucky. Providing value is a must, but sometimes you’ll face numerous companies that have something similar in their store.

When sticking out from the bunch becomes an unrealistic concept, start thinking how to position yourself in an already existing market instead of creating one.

The idea behind the market penetration pricing strategy:

• Set a lower price than any of your competitors
• Survive initial losses
• Penetrate on the market
• Increase awareness about your offer
• Use your community to build a brand image
• Position yourself as a market leader or influencer
• Upsell or raise your prices
• Start making profit

You see, the idea here is simple. Lower your prices to the point you break even or experience small losses until you position yourself on the market, and customers recognize the value of your offer. After that, you can apply different monetization methods starting from subscription plans to renewals or just increase the price of your product targeting new customers.

Price Skimming

If you’re working on a product or service that’s a part of an emerging market, it’s quite possible that you’re able to successfully target early adopters with pre-release offers.

Depending on the niche you’re operating in, you can rest assured that early adopters will pay a premium price just to have the product before anyone else.

How price skimming actually works

IFTTT smart devices are a good example of a market where this marketing pricing strategy can be applied.

There is only couple of industry leaders in this niche and their product offer isn’t so versatile, both horizontally and vertically, which means an eCommerce startup can launch an innovative product even if one already exists on the market.

Placing a high price tag for pre-release orders is what makes this pricing strategy unique.

Your goal here is to make high profits before you release the product on the market and skim the price as the user base increases.

This way you create an elite image around your brand at the beginning and have the space to create a success story around your brand at the same time.

Psychology Pricing

This is one that every local bodega uses to create its pricing sheet, but it’s also backed up by behavioral economy researches.

One of the core ideas behind this pricing strategy is that consumers pay more attention to the first number of the price rather than the actual amount. So, if your product has a value of $500, you’ll increase the number of sales by simply placing a price tag of let’s say $479.

You won’t lose much, but you can gain a great deal in terms of return of investment. Setting a lower numbered price tag isn’t the only thing you can apply to trigger a certain user behavior.

Something connected more with your marketing efforts rather than your pricing strategy is creating marketing campaigns that trigger a certain emotional response with your audience, the most successful one being fear.

Bundle Pricing

This is great for businesses that offer services, because it’s entirely possible you may offer complementary features as a part of your main offer. Great yet not exclusive for service providers. Little bit of creativity and you can add freebies alongside your original product.

Bundle pricing is great because it gives you an opportunity to promote less known offers that you have in store.

BestBuy is the king of bundle creation

People tend to perceive bundles as a high value investment because they receive more than they’ve paid for. Just go and watch couple of minutes of “Top Shop” commercials and you’ll see what we’re getting at.

How to choose?

It may seem hard to choose the perfect marketing pricing strategy for your business, so just remember nothing is perfect in the world of economy. It’s all about testing until you get in a place where you feel comfortable and even more important, time and place where you make profit.

Mixing couple of different pricing strategies is also something you can consider doing. Psychology pricing works great with bundles for example.

What’s your favorite pricing strategy and how do you plan to implement it? Feel free to fill up the comment section or contact us via social media. We’ll try to help you find the right strategy for your needs.