While selling on ShopClues is easy, deciding how to price the products is one of the toughest tasks. Your pricing strategy can make or break your online business. However, there is no sure shot formula. It usually involves considering various key factors, decoding the answers to some important questions and then pricing your products right that also covers your costs and earns you profits.
Important Factors To Consider Before Pricing Your Products
Calculate All Costs
The most obvious and important factor to consider is the complete product cost. Don’t forget to add the overhead costs like rent, transportation, marketing cost, labor costs, shipping fees, packaging material, marketplace commission, etc. You should include these in order to get the final product cost.
Know Your Buyers
It is always recommended to do a little research on the buying patterns of your targeted customer. Ask yourself a few questions like who is my audience – niche or general? How common or uncommon my product is? Are there a lot of competitors in your market? By answering these questions, you can figure out your buyer segment, understand their behavioral pattern and price your products accordingly.
Keep an Eye on Your Competitors
When you are selling on large marketplaces like ShopClues, there are higher chances that somebody is selling same or similar product/s as of yours. It is helpful to check the price of your competitor’s product because your customers are going to do the same. Check if the price offered by you is comparable. If not, then set their pricing as your initial gauge. In case you are unable to match that price, then check if you can add some extra value to your product like a free gift. Remember to compare the offered price (after discounts) and not just the actual price.
Don’t Forget The Profits
At the end of the day, everyone is selling online to earn profits. Set a revenue target for your business and calculate your profits. You can consider the profits in your production cost, marketing and selling cost involved. Calculate this cost, add this to your product cost and then set a price. In case you are selling products of multiple categories, then you can divide your revenue target category wise and then set the price which will help you achieve your business goals.
Keep On Monitoring
Setting your product’s price is not a just one-time task. It is always helpful to continuously monitor the prices and your profitability. You can do it month wise. If that’s too much, then monitor your prices every 3 months. Be super honest with your evaluations. Remember, you are doing this exercise for your own business.
P.S. in order to help you set your product’s price easily on ShopClues, we provide a PayOut Calculator. Here’s you can choose your category and the set price (selling pricing). This calculator will automatically calculate the net payout that you will get after marketplace deductions like shipping costs, discount, selling service fees and fulfillment service fees.