It is not easy to maintain and survive in today’s market where a new competitor is arriving every other day. Customers, be it direct or indirect, are hard to keep loyal to a specific brand when offered several options at competitive prices. As a customer, you must have experienced a time when the features of a competitive product caused you to change your mind when making the decision to purchase the product.
One of the most significant factors that stimulates customers’ buying decisions is budget, i.e., the pricing offered by the company. A customer evaluates a product based on the quality and durability offered within the budgeted price. However, the product offered by any company includes several other costly components such as marketing cost, salaries of staff, rental and holding cost, etc.
With so many costs included, it is challenging to offer the customer a convincing price to hook them onto the product and generate consistent sales. To address such challenges regularly, suppliers need to fabricate strategies for pricing to facilitate B2B and B2C customers.
Tips for improved B2B and B2C eCommerce
For sure, the 20-80 rule prevails for many suppliers in the market, but is not enough to rely on for the business overall. Out of numerous pricing strategies like economy pricing, premium pricing, psychology pricing, etc., you may adopt one or a combination of some that suit you best.
Choosing the best competitive price that covers all the incurred costs along with a reasonable profit margin requires specific practical strategies. Here are five tips to construct enhanced pricing strategies.
- Market Prices
Keeping a regular check on the market prices offered within the industry is essential. B2B customers are well aware of pricing when making wholesale purchases, and are even offered special discounted prices from sellers.
Loyal customers, including both B2B and B2C, may agree to pay higher prices for an added value on products. However, keeping them hooked on your product in the long run requires a continuous evaluation and comparison of the competitors’ pricing.
Research for the competitive price will extend based on the line of products you are dealing with. For example, research will vary for different collections if you are selling clothes or shoes, i.e., casual, formal, fusion, etc.
- Wholesale Price Effects
Not all companies can afford or practice forward or backward integrations to support their products and services. This interdependency for business on other business results in B2B business, and contributes to a significant amount of profitability when making wholesale sales. Direct customers, i.e. B2C customers, contribute in relatively smaller amounts. However, their purchases are often more frequent than those of B2B customers.
For offering the best competitive prices to your B2B customers, research will also be needed to review the pricing offered within wholesale markets. This practice of reviewing the wholesale market will enable you to attract retail customers by offering the best possible prices.
- B2C Customers
Direct customers, i.e, B2C customers, contribute relatively smaller amounts to your profitability; however, their number of purchases is multiple to that of B2B customers. It is crucial to understand the current trend prevailing in the retail market. The dynamics of the fashion industry are constantly changing. These changing trends depend on various factors that include climate change, cultural inheritance, modern needs, etc.
These retail customers’ needs vary throughout the year, affecting their preferences and ultimately their desire to pay for a specific product. Offering discounted prices and other loyalty campaigns are ways to attract B2C customers during these seasons, i.e., marriage, Christmas, New Year’s Eve, etc.
Remember that sentimental values are often associated with purchases to price the product at an amount that factors in the emotional value experienced by the customer. Therefore, value-based pricing is one way to improve your pricing strategy to increase product sales periodically, if not permanently.
- Dynamic Pricing
Not all products can be offered at the same price throughout the year. Raising prices during peak purchase seasons may work for some sellers, while other sellers grab the attention of the customer during seasons by offering reduced prices on products. These discounted prices attract large volume purchases, creating a win-win situation for sellers and buyers, and eventually profitability.
However, pricing products can also be profitable when calculated by carefully analyzing and managing data that shows customer purchase behavior. Customers’ needs, including when they purchase, how much they are willing to pay, and when the product is purchased, change throughout the year. The decision of pricing your products differently requires additional efforts that should be supported with reliable data obtained from both internal and external sources.
- Optimizing Channels for Selling
Recognizing the power of eCommerce is key. Customers worldwide have numerous choices today at their fingertips, making them unwilling to deal with the hassle of visiting physical stores. Why waste effort and time when you can have the product directly at your doorstep within a few clicks?
Ecommerce has created numerous opportunities for businesses and dramatically helped sellers reach their focused market without worrying about physical distances. Within the extended market, sellers need to cater their pricing strategy to many geographically scattered markets with competitive pricing.
Customizing your business process to support discounts or offering special prices may help your pricing strategy. This can be done through proper planning and investing in digitalization which is a common but challenging practice today.
The integration of eCommerce into your pricing strategy empowers the customer to self-serve in many cases. With this ease of shopping, customers often do not mind paying a little extra for the convenience of obtaining the item without leaving the house.
Pricing strategies are numerous for both B2B and B2C customers. For B2B, a seller needs to analyze the size of the business, which usually has recurrent customers with long term business relationships and sales cycles. On the other hand, B2C customers tend to have different purchase behaviours throughout the year.
Choosing pricing strategies that cater to the customer and obtaining credentials for profitability is a challenge in today’s dynamic market, but can be done using the business tips above.