When we are asked what is the failing point of online stores, or in other words – “why do everyone manage to make sales and I don’t?”, the answer almost always lies in the content of the website itself. Not in ads, not in platforms, not even in products – it’s almost always a fairly simple answer – the prices!
Price management in an online store
Did you hire the best marketing company? Have you invested in a website that looks insane?! Amazing, now you are wondering why there are no sales or why there aren’t enough sales.
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If this sounds and looks familiar to you, it’s because about 80% of online internet stores are not really profitable. Those who sell cover expenses and nothing more. Only about 20% of online stores really profit from the activity and justify the investment of time and money they pour into the website.
An average website has hundreds and thousands of products. But from the moment they are uploaded to the website, if there is no synchronization with an automatic inventory system, there is no change in prices. Then, we have two possible results:
- No purchases – the price is too expensive.
- There are purchases – but we cannot supply the product at the displayed price.
The result, of course, is economic infeasibility.
The key to solving this problem is effective management of product prices on the website.
We mean it, ask us anything!
How and how often to change product prices in the store?
In general – it is advisable to update product prices in real-time upon receiving a notification from a supplier about a price increase of a product and/or a product stock limit. We almost always do not lower the prices of the products, and this is because as of the last few years, the prices of products are constantly increasing in all categories as a result of transportation, inflation, etc.
But, we are also in a competitive arena, so we don’t always want to be the first one to raise their prices, because online, the cheapest price always wins. And we must constantly examine our ability to be attractive with the main product and to generate additional income from ancillary products.
And the answers in brief:
- Price update frequency is recommended to be done in real-time.
- How to update prices – through quantitative or manual editing.
Here are some convenient practices for managing product prices in an online store:
There is not always time to update prices in real-time. We do have a physical business to manage as it is… that’s why we will try to find a method that is convenient for us to keep the prices up-to-date and maintain attractiveness, and at the same time as managing the physical business.
- Update once a week – manual review of products that we sell well and update prices.
- Update once a month – manual review of products sold in the past month to update their price.
- Update via sales – setting a full price when creating the product and controlling prices through a sales add-on.
- Update via deliveries – setting a full price when creating the product and controlling prices through delivery costs.
- Update via a webmaster – contact a website management company that will check and update prices according to competitors.
- Update using a bot – you can attach a bot to price comparison websites and thus always update the prices to a specified threshold.
As a general rule, we don’t want to be the cheapest, certainly not if it means a loss for every sale made (the costs of handling and refunds must also be considered), but we do want to choose certain products where we can lose money both because we have them overstocked and they simply take up space and do not generate income, and/or because they can be used to attract customers to purchase a variety of related products in which we have a huge profit.
In conclusion,
Although there are various limits on the prices (including the importers who will yell at you if you exaggerate), this element of the website’s content has all the power to determine whether you will see many or few sales. We recommend you to sit down, examine the business, understand what the right strategy is for you, and then carefully manage the prices in the store. If you feel unsure about this topic or want to consult about it, feel free to contact us to ask us anything, and we will be happy to help!
