The Best Way to win a price war

As the Internet keeps growing, and more customers are getting to be web savvy, ecommerce sales likewise grow. It’s inevitable that many (indeed most) shoppers are driven by price. They search for the lowest price they can find. Thus the price wars. It would be foolish to run an ecommerce company without taking into account these price wars, and winning them.

First you want to define what you mean by winning. You win when you continue to make sufficient sales at a suitable margin. You don’t win by dropping your price too low simply to make sales.

Take Amazon. It’s assumed by many that it’s only driven by price. This isn’t wholly correct. Whilst price does play its role, it’s not the only criteria. On Amazon, the vendor that wins the purchase box receives most the sales. The winner of the purchase box is determined not just on price, but on rate of dispatch, amount of positive feedback, and quite a few other factors. Thus in the event you provide a greater value than your opponents, you can control more than them and still get a share of the purchase box. Amazon values good customer support. Customers have a tendency to be lazy. They tend to purchase from the”Buy Now” box on Amazon, as opposed to searching for a more affordable seller.

Further you want to study Amazon’s catalogue. Whilst in theory there’s intended to be only one entry for each item, on the more popular things there may be several duplicate entries. Lazy sellers will simply list . Intelligent sellers will list on all. It’s very likely that the duplicate entries won’t be as hotly contested and hence may have higher prices. Further you need to see what you could do to enhance these less contested entries so clients are more likely to see them in their searches. You need to ensure that the entry has a complete description; great key word bullet points, and uses search engines that are sensible. If you do it correctly these duplicate entries will climb up the revenue rankings and you can similarly increase earnings. Eventually however Amazon will merge the copies and you’ll need to change battlegrounds.

Additionally you should consider Fulfillment by Amazon (FBA). I’ve long resisted this, but I can see the benefits. Primarily, for U.K. sellers, FBA’s satisfaction costs for moderate sized things are approximately 30 percent less than the lowest priced U.K. postage cost. Second FBA items get the purchase box even if they’re significantly more costly than the non-FBA alternatives. The thing to look out for, however, is storage costs. There’s simply no point in sending slow-selling stock to Amazon. Any gain will be eaten by the storage costs.

List names, categories, and descriptions are much more significant on Ebay. Here there’s another entry for each seller. It’s far easier to sell at a premium to more affordable vendors if your product comes up on a search and theirs doesn’t. Hence you want to do appropriate search optimization on your own listings. This is to not just to get your list found on Google, but also to find prominence on Ebay’s search.

Then you will need to acquire clever regarding what you record. Lazy sellers will simply make an entry for each and every item they have. Intelligent sellers will go further and consider creating collections. This is particularly helpful when the goods come in assortments and one proves to be more popular than others in the variety. If you bundle them all together, you get to market the less popular alongside the much-desired product. Not only are you increasing your average order value, you’re also likely getting a better price for the less popular things than selling them separately. Indeed I have often seen some vendors order if lots of various products, sell off the popular ones at a nice premium, and then ditch the market the massive number of less popular ones. Merely to eliminate them. By selling in bundles and sets, you’re less likely to be caught with a surplus of items which are being given away by other people.

Finally you must give priority to your personal sites. Amazon, Ebay, and PayPal are ruthless when it comes to consumer complaints. There’s always a temptation by some merchants to place sales on such websites ahead of their own. This is the incorrect thing to do; all revenue should be equivalent. Having said that, you are most likely to earn at least 10 percent more margin on sales made on your own sites because of not paying a commission. If you’re in Europe, you can pass some or all this savings to your clients. You can make it a quality that you offer better value directly, on your own websites. This can convince shoppers to purchase directly from you, as opposed to via Amazon or Ebay. Indeed in case you provide payment by PayPal and Checkout by Amazon, it is possible to say that the buyers have the same protection as though they were on Ebay or Amazon.

A further consideration is time. Popular things run out. If you still have inventory when everyone else runs out, you may choose your price. Allow the bedroom sellers burn their inventory at cost or less. They may win the first price battles. But ultimately you’ll win the price war by selling at premium prices long after they’ve sold out.

Leave a Reply

Your email address will not be published.