Different marketplaces like Amazon, eBay, or Google Shopping might require different pricing strategy tactics. Making decisions about pricing is considered to be very tough for omnichannel retailers. Should a grocery item retailer charge the same for online customers as offered in the retail stores? Except for certain circumstances, keeping the pricing strategy separate for online and offline customers is always wise.
Some channels are often offering higher prices on their websites than their retail stores, and sometimes their logic behind this strategy is to encourage their customers to buy more from their physical stores. Study shows that retailers who keep the pricing separate for their websites and offline stores are seeing bottom-line growth of 2% to 5%.
Where should be the focus of the pricing team?
Basically, the pricing team needs to focus on dynamic pricing strategies on different channels. In Online stores, consumers have more options to compare and select from numerous numbers stores. So, it is evident that the pricing strategy may not be the same as that of the retail stores.
Talking about online selling, when we consider the marketplaces like Amazon, eBay, Google shopping, etc. All these marketplaces are offering competition between millions of sellers and billions of products. The competition is mainly on pricing, and if you want to sustain and gain profit here, you need a strong price monitoring system for your business. The product description or images cannot help you much if you are not offering the best to your customer.
If you set the price too high, you will be quickly outpriced, and if you set it too low, you might be at risk of losing out on a mountain of revenue potential. When it comes to pricing optimization, it is just not a matter of simple calculation. It includes the factors like the amount of stock you have, what kind of brand image you uphold, and definitely the prices that your competitors are offering.
Importance of selecting proper marketplace:
One more key factor that needs to be considered in the marketplace you list your items with. For example, Amazon and eBay are very popular marketplaces, but they work in totally different strategies. Amazon is more buyer-oriented, and they offer their products as a retail store, whereas eBay is acting more like an auction house and is more seller-oriented. The charges they are taking from the sellers also vary. Amazon is basically offering the sellers two different types of accounts; professional and individual accounts. The charges taken by Amazon depend on the account type. Whereas eBay charges all the sellers two different fees: the insertion fee and the final value fee. These fees will vary from marketplace to marketplace, so your product pricing will definitely be different as per the marketplace rules.