What Are The Ecommerce Pricing Options?


The introduction of the internet has given rise to an increase in the range and style of ecommerce pricing strategies. The fixed price approach adopted by offline counterparts, whilst used to a significant extent, is not the only pricing mechanism employed in the online world. Companies that are looking for an ecommerce pricing approach can learn, adapt of adopt the following price considerations:

Dynamic pricing: This approach is utilized by companies who match price according to the changing demands of the market place. This flexible approach can incorporate auction pricing, seasonal factors and the stage the product is in relative to the product life cycle. The strategy can also be adapted to meet the goals and objectives of the company. If, for instance, the company is undergoing a product launch, it may wish to maximize cash flow by offering a special introductory price subject to a time deadline. This is used extensively by publishers of digital material who do not have inventory carrying costs and can offer substantial discounts upfront to gain immediate cash flow and to offset advertising costs.

Dynamic pricing is also used by bundling products together and offering discounts according to the quantity purchased. This provides an incentive for bulk purchasers. An adaptation of this approach is to bundle products together and offer cost savings on one of the items. In the case of digital products or membership based sites, the ecommerce pricing model can offer different packages graded according to goods or services provided. A gold, silver and bronze package, for example, may contain additional consulting bonuses, product bonuses or service offering depending on which package is selected. This provides a way for vendors to value add and customers to save on the cost of items that would otherwise be purchased separately at a higher cost.

Before implementing an internet pricing strategy, it is prudent to undertake some market research to investigate the current state of competition and to ascertain some insight into the purchasing behavior of the target market. The demographic profile that constitutes your likely market will provide more information and open up new avenues to investigate for pricing options.

With the increase in competition on the internet, ecommerce pricing changes to reflect the competitive nature of the online landscape and the changing purchasing habits and tastes of consumers. This is particularly the case where internet buzz precedes a product launch. When demand is high and supply is short, companies are taking advantage of this demand by keeping prices artificially high. When the hype dies down and supply becomes more plentiful, competition creates a pricing shift which is more favorable to the consumer.

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