Optimising Your Store’s Pricing4 min read

One of the great benefits of dropshipping is that you never have to store inventory, or spend time managing it. This saves you ample time which you can focus on selling. Your financial risk is minimised to zero as you don’t have to buy a product until you make a sale.

There is no single pricing strategy that will fit every type of dropshipping business. However, there are a number of ways that you can improve your pricing and cater it better to your products.

Your product:

The first thing you need to consider is what you are selling. The type of product determines the pricing strategy that can be implemented, as not every product can be priced in the same way.

For instance, electronics or certain clothes may sell in higher volume but with a lower profit margin. On the contrary, fragrances and home decor may sell lower in volume but with a higher margin. Pay attention to the product types that you can sell and consider the pricing strategy in accordance with the product source that you have selected.

Discounts:

One tip that might be of use to your dropshipping store is to focus on discounts, deals, and offers.

For instance, you can start off by keeping your price high and then once you feel more comfortable in your space you can start offering discounts, coupons, or deals to your customers. Varying the price a bit may also show you how many new customers you can attract at the lower price, and as a result give you a better understanding of the market and the customers.

Opt for zero/minimal shipping costs:

Shipping costs always reduce the profit margin, so it’s always better to focus on the products with no shipping costs as it will be preferred by your customers too.

Returns:

It can be very stressful as a dropshipper or supplier to get products returned. The aim here is to focus on the satisfaction of the customer, so keep that in mind. Knowing how to manage your customers is a sign of a good business.

Once the customers know that they can trust your dealings, they will be willing to pay good prices for what you are offering.

Be open to changes:

Change is the only constant. You might not benefit from sticking to the same strategy forever. Try new strategies and explore new areas, especially in terms of your product line. Analyse how different markets react to different pricing strategies. Keep an eye on your competitors and regularly assess your pricing strategy. Once the customers like what they are seeing, they will visit again.

If you are providing the customers a good variety paired with high quality products, they will be more willing to pay a good price for it.

Psychological Pricing:

Another great tip for your drop shipping pricing strategy is to mark the price of your product ending with odd numbers. So instead of $20, you can offer $19.99. Customers normally seem to prefer the latter option. You can play around with your pricing and see how well it works for your dropshipping store.

Customer Service:

Pay close attention to the needs of your customers and aim to provide the best customer service.

In the end, if you build a good reputation, your customers will be willing to pay a higher price for a better service. It’s about building the trust and working on your relationship with your customers.

Cheap isn’t always the answer:

Simply listing cheap products might not work wonders for your dropshipping business.

You need to work on building a reputable image as a dropshippe, and continuing to list your products at the cheapest price may lead to your customers feeling that you offer low-quality products. This may discourage them from purchasing anything at your store.

As you have seen throughout this article, pricing your products is a decision that has a lot of factors to take into consideration.

The business itself, competitors and customers are the three top areas to think about. I don’t think there is a single person in your business that is an expert on all three.

So take advantage of the fact that a group makes better decisions than a single isolated person, and make pricing a strategic decision that involves the full company.

If you nail your pricing strategy for ecommerce your conversion rates will rise, and your company will be more efficient.

Best of luck, and happy selling!


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