*This blog post is my personal opinion only and contains affiliate/referral links.
On my last post i talked about my foray on affiliate marketing, for this post i thought i follow it up with my experience on product pricing and price negotiation in general.
*For the record i am promoting two e-books 1) The Beginner’s Guide to Analyzing Financial Statements and 2) 6 Pillars of an Alpha Investment, because these products had served me well not just on financial literacy but also on a creation of an investing goal which hopefully will lead to early financial independence.
Let me start by saying i have two e-commerce dropshipping stores and i recently tried physical product flipping. I have to add that i am a novice at both and i am still learning the ropes of being a small business proprietor. My Shopify store (update – store close) is 5 months old and my new Etsy store is a product of the quarantine side hustle that i created less than a month ago. I will talk less about the latter because it has not gather enough traction yet to be a profitable store. Flipping products is very recent too, which almost gives me no authority to be taken seriously but for the sake of this blog i’ll give my very little two cent worth.
A sale is a sale and it is very gratifying when you know your marketing and pricing strategy are working. Having one sale is one thing but having more sales is another and that is what most store owners (including me) want to achieve. I never knew it then but the whole online selling in a business owner’s mind is a psychological game of attracting the best deal and accordingly the best price.
I remember the first thing that i do before i put a price on my items is to research my competitors’ prices. Because i am new in the field, i know that to attract customers i have to beat my competitors’ prices, that is product with the same quality would stand out if my price is lower or has a better deal than them.
Examples of this pricing strategy are: 1) Buy 2 (product) Get 1 (product) Free 2) Low price plus Free Shipping 3) 30% Discount plus Free Shipping, just to name a few.
As you can see, the words “FREE” and “DISCOUNT” are golden on the eyes of the consumers. The mind processes these words and it triggers an idea that they are getting more for what they paid for. It is particularly useful if they see these words in bold letters on the heading of the landing page.
The catch here is to grab the consumer’s short span of attention, which is getting shorter and shorter in an information age where almost every consumerable item is readily available for purchase in the internet. If you are able to net their interest and this ultimately lead to a purchase, that means you earn their trust to participate in the buying experience, and also build on a customer base that may engage in upsells and future transactions.
My Etsy store is still in its infancy so i’ll let it grow and mature first, and hopefully i will be able to write about in the near future with glowing news.
The flipping selling is also very young but is more upfront when it comes to customer interaction. The way flipping works is i list a product that i bought at a low price on a selling platform and then i engage with a potential buyer about the pricing. My experience so far is with Facebook Marketplace. Price is negotiable that’s why it is important to set a reasonable high price and leave room for negotiation.
In my experience, a good and timely product will speak for itself and notably dictate the price, but since there is an interaction between the buyer and the seller, a compromise has to be made so both can agree on a price.
One of my unforgettable exchanges with a customer is when she told me she doesn’t have a change to spare because her son has already put all the coins in his piggy bank. This is an appeal that is more human than business-like and therefore i have to strike a deal unequivocally.
To wrap this all up, pricing is just one element that has to be considered in all fronts so a business, especially for a new store. can be competitive as well as sustainable first in the short run and then, if successful, for a long time commitment. Having a flexible pricing strategy is key in finding customers and engaging them to click that buy button on your check-out page. My theory is if a store is successful in the first few months, a store owner can focus early on if the store is worth scaling in the future.
Thank you for reading.
Please feel free to share any experience you have with pricing or pricing strategy.