Every business owner asks themselves from time to time, is their strategy right, or maybe they should try a slightly different direction? One of the most critical questions is, of course, whether to sell a lot for cheap or sell a few, for a higher price? While in the physical world, the location of the business has significance in the answer to this question, on the online store on the other hand – the answers are much more complex.
Sell a lot of items for cheap or a few items for a high price?
Before we try to answer this question, let’s present the considerations quickly:
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Sell cheap online:
- Internet users are price biased!
- There is no real differentiation online other than price!
- Cheap prices guarantee repeat business!
Sell expensive online:
- More room to maneuver in the advertising budget!
- Personal care and better-quality service for every user!
- Managing a better balance between the physical/online business!
We will detail out these considerations.
Online sales strategy
Most store owners naturally choose the cheap sales strategy. They do it because that’s what everyone else is doing, because that’s what the internet demands of them!
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But the truth is, this is an inferior strategy compared to other strategies. It’s easy to offer good prices and generate sales, but what about the bottom line, the profit line? Well, being cheap = earning little or even not earning at all!
Yes, you’ve read that right. Most internet stores are not profitable on their own merits, most websites justify their activity thanks to the physical store that receives exposure and fairly effective advertising online. It is very difficult to make a profit with online sales.
We suggest you open your mind and think in a slightly different direction, offer quality over quantity, offer value over a cheap price.
To do this, you must answer the following questions:
- What do you offer that’s better than others?
- Which target audiences are willing to pay more?
- Why is it worth it for users to pay you more for your products?
Sometimes just a few deals are worth a lot of money. This is when constructing a long-term strategy based on exceptional customer service, maintaining continuous contact with customers (for repeat purchase) and, of course, offering value that’s independent to the transactions themselves.
Every product requires involvement – photographing the product, describing the product, advertising the product, receiving orders, sending orders, receiving reviews, and more.
When there are many small orders with zero profitability, there is a lot of “noise”, but the effectiveness is poor. On the other hand, when there are few orders that have a better value to the business, the business owner can invest in each buyer as needed!
Still, what about my specific field?
Not everyone can afford to be “expensive”. There are industries where the product is completely generic such as the electrical and cellular industries, those who want a Samsung brand refrigerator, or an LG brand TV screen will get the exact same product from any supplier they choose.
Furthermore, those who handle these types of orders will mostly be the importers themselves (back-to-back orders) and in fact it is difficult if not impossible to produce added value other than price.
In these cases, the amount! Has the value. This is in an attempt to win the same “bonuses” that the importers give to reward stores that sell their products in large volumes – about 5% of the total turnover.
In other words, it’s not black or white. It is advisable to examine the strategy that suits you, with the business consultant or with the management company that you choose.
Still debating? Just contact us for a consultation at no cost and with no obligation. We will be happy to help you, too!
