eCommerce Tips: How to Properly Price Your Products

This post may contain affiliate links and I may receive a small commission if you make a purchase using these links – at no extra cost for you. Please read my disclaimer here.

Do you ever wonder what the best way is to set a price for your products? You may have heard that pricing too high will turn people away, but pricing too low might mean less profit. 

But how do you find this "sweet spot"? And how can you make sure that your prices are competitive with other similar stores? 

If these questions sound familiar, then read on! 

We'll break down some of the most important aspects of pricing and give you tips for setting yours at just the right level. This includes things like how to set a price, what not to do when pricing, and other details to keep in mind when determining the right price. 

Pricing your products isn't as easy as it seems, but with these tips, you'll be able to make the right decisions from the start!

Consider your costs

When pricing your products, you have to start out by taking your costs into consideration. What does this mean? 

How to Properly Price Your Products

Well, let's say you make a plush toy. You may have to spend money on buying materials for your product, hiring people to help you build it, and additional time spent on sewing each individual piece together

Therefore, when looking at how much to charge for your product, you should take into account the entire production process! And don't forget about the shipping costs. Whether you pay for it or the customer does that, you can Use Coolparcel's UPS shipping calculator to see how much is shipping going to cost you. This is a useful tool for e-commerce businesses.

Now, imagine that preparing the fabric and cutting it to size costs $5. You also need to spend $3 on materials such as stuffing and plastic eyes, and you pay your seamstresses $5 an hour to take all of these pieces and construct the toy. 

That means that in total it costs you $13 for each plush toy! Add additional money for advertising, packing it up securely, labeling it, and shipping. If you want to make a decent profit from selling your plush toys, then you should price them to sell at $25 or higher. 

Compare yourself to others in your industry

When determining prices for your products, it's important to take into account how you're going to compete with similar stores. This means that you need to look at your competition's prices. This is important because customers are always looking for the best deal

If it seems like most plush toys cost between $25 and $30, then that's probably around the range they expect to pay. You might be able to charge a little more or less than this, but it's important to be aware of how you compare with others in your industry. If customers can buy a similar product for less money from another store, then they probably will! 

And don't forget to consider your competitors' shipping and refund policies. If they're not offering the same thing as you, then this might give them an advantage. 

The quality of your product

When it comes to pricing your products, the quality of your product is a huge factor. Customers are always looking for the best deal, and if they think they can get a higher-quality product for a lower price, they'll likely go with the other store. 

This is why it's so important to make sure that you're putting out a quality product! If you're not sure where to start, ask some friends or family members for their honest opinion. And don't forget to look at reviews online. 

If people are saying that your product falls apart after a few uses, or that the colors fade quickly, then you need to take this into account when pricing. You may need to adjust your prices so that customers feel like they're getting a good deal.

The quality of your product will depend on several factors such as how it's made, the materials used to make it, and who you're buying them from. If the price of your product is too high, then customers are going to have a hard time believing that you've put so much effort into it! 

Consider the budget your customers have

For some, this is a difficult situation as they might not know how much their customers can spend. You want to give your customers the option to buy your product, but you also want them to be happy with the price! One way to do this is by examining your target audience. 

Consider the budget your customers have

If you make products for teenagers and young adults, then it's safe to say that they probably have a smaller budget than an adult with a family. You need to be aware of your target audience so that you can price accordingly. 

Think about your revenue goals

When pricing your product, it's important to keep your revenue goals in mind. This means that you need to think about how much money you want to make from each sale. If you're not sure what your goals are, then it's time to sit down and figure them out. This will help you determine the right price for your product. 

You also need to consider other factors such as how often you want to sell your product and how many products you want to sell each month/year. For example, if your goal is to make $1,000 per month with your plush toys, then you'll need to figure out how many plush toys you need to sell each day. You can then use that information to determine the right price for them. 

Think about where the market is headed

Besides researching the market to find out how your competitors are pricing their products, you also need to consider where the market is headed. This means that you should take a look at trends so that you can determine whether the prices will go up or down. 

For example, if your product is new on the market and you don't have any competition, then it's more likely that your prices will go up. And if the market is already flooded with similar products and no one seems interested in buying them anymore, then you can expect your price to go down. 

Either way, you need to be aware of what's going on with the market so that you can base your decisions on that. 

The niche you're in

When it comes to pricing your product, the niche you're in can have a big impact. For example, products targeted towards children will be sold for less than products targeted towards adults. This isn't to say that all children's products should cost the same, because they don't! 

Another thing to keep in mind is that some niches are willing to pay more for a product than others. For example, luxury products tend to have a higher price tag than those that are considered mundane. If you're not sure how much to price your product, then you need to do more research on the niche. 

For example, if you're selling makeup brushes, are they considered luxury or mundane? 

Know when to discount

Discounts are a great way to get customers interested in your product, and they can also help you move more inventory!

However, you need to be careful with how you offer discounts, because if they're not done correctly then it can actually hurt your business

Know when to discount

The best time to offer discounts is when you're introducing a new product to the market. This will help get people interested in buying it, and it will also help you sell more of them. You can also offer discounts when you're trying to clear out old inventory. 

This is a great way to make room for new products, and it's also a way to get rid of products that aren't selling well. Also, don't forget about the holiday season! You can offer discounts around the holidays to give your customers more reasons to buy. 

Know when to set a higher price

Besides offering discounts, you can also set a higher price for your product(s). Sometimes this is a good idea, especially if you know that customers are willing to purchase it at a higher price. 

For example, luxury products tend to have a high price tag, and there's usually no need to lower them because customers expect it. This doesn't mean that you can't offer discounts, but you don't have to all of the time. And if a customer does ask for a discount, then feel free to give them one! This is a great way to make your customers happy without selling yourself short.

Final words: eCommerce tips - how to properly price your products

Now you know how to properly price your products for e-commerce! Whether you're pricing a digital product or physical merchandise, there are many factors that go into figuring out the right amount. 

Consider your costs, your competition and the market, your customers, and their budgets think about the quality of your product and don't forget to offer discounts when they're most appropriate. 

Follow these 9 tips and you'll be able to create an effective strategy in no time.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}