How you price your products can either lead you to success or cause your shop to fail. It’s important to take the time and energy to research the perfect strategy to price each of your products.
There are many different pricing strategies that are used in today’s market and amongst your competitors. Here are some of the common strategies used:
1. Competitor Pricing: This common pricing strategy primarily focuses on the going rate for pricing a product without giving much consideration to the cost of the product nor customer demand. A competitor’s price is used as the benchmark for what to price the same product.
2. Dynamic Pricing: Commonly known as time-based pricing or demand pricing. When using this strategy, the prices of products shift due to customer demand. For a custom t-shirt company that focuses on schools, the prices may change during the school year and shift again in the summer.
3. Penetration Pricing: This strategy is often used when a new business opens or a new product is being offered. It’s used to draw attention away from other competitors and to bring that attention towards the new business and/or product.
4. Value-Based Pricing: What is the customer willing to pay? How valuable is this product to your customers? This strategy is great for sentimental products and products that connect with customers’ emotions and habits.
5. Markup Pricing: This strategy determines how much it costs to produce a product, then mark it up for the desired profit. This is commonly used with sign makers.
These common pricing strategies are just a handful of strategies that are used in today’s market. Setting time aside to determine which one of these strategies is best for you can benefit your business. Also, consider combining different pricing strategies for your products.
Regardless of which strategy you use, it’s simple to price your products in shopVOX. If you change your pricing, you can easily alter your pricing templates in shopVOX.
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