Booming sales, big profits, constant orders - that's the dream of every entrepreneur. And also about reliable suppliers who offer the lowest prices and goods of the highest quality.
Dropshipping allows you to sell goods that do not require upfront investment. The seller is spared the extra expense of renting a warehouse, the issues of overstocking and seasonality do not worry him too. His job is to find a reliable supplier, quality goods and not to miss the price. Not so long ago services began to appear that classify goods by importance to the company's profits. Among them is Step Link, a popular platform for analyzing products, which helps to increase the efficiency of any company.
The success and failure of an online store depend on many factors. Pricing strategy plays a crucial role in attracting customers and affects profit margins, profitability and turnover.
When calculating profit, the dropshipper must take into account: overhead, taxes, marketing, advertising and promotion costs. The profit of an online store is the difference between the retail price on the website and the cost of the product from its supplier. The average margin for this business model is typically 15-20%.
Unless you are selling a unique product with your own brand name, visitors to your online store have probably already seen similar products on other sites. What is its retail price? At what price do your competitors sell it? How do you set the price for certain items? When is it worth it to go up?
Smoothly. No jumps.
Your dropshipping business is working well, stably bringing in some income. You have regular customers, and the attendance of the online store is constantly growing. At this point, you may be tempted to raise prices. Is it worth it to do so?
Keep in mind that a drastic price increase may do more harm to your business than good. If you decide to do it, you should act smoothly, increasing the price in several steps. At the same time, closely monitor consumer and competitor reactions.
Plan for a small monthly increase. This way you won't scare away customers and gradually get closer to your desired profit margin.
Even/Odd pricing.
Nowadays almost every second store uses the ‘even-odd’ method of pricing. It's a well-known and fairly trivial marketing technique. But it works! You know it, of course. Instead of a ‘round’ price of, say, $50, you set a close to desirable odd price of $49.95. This method of pricing is quite simple and effective.
Clearly, there is not much difference. However, very often most of us round the number down and take it as $49.
Impulse discounts
Creating a sense of urgency by offering discounts is another way to get your customers' attention. You can raise the price of a product slightly and then introduce a ‘discount.
Bundled discounts work wonders and allow you to increase sales and attract more customers. Most often, discount offers are designed for impulse and unplanned purchases. This is a great way to get more profits. It is worth thinking through a policy of discounts, introducing them on a particular group of products or on the product that is in the greatest demand.
Recurring orders.
Evaluate the number of recurring sales you are getting. The goal of any business is not only to attract new customers, but also to retain old ones. Analyze your order history. If you're getting recurring orders from the same customers, you can think about increasing your profit margin.
Repeat orders show that customers are satisfied with the quality of the products. This means that in most cases they won't take a small price increase as a tragedy. It will not scare them away.
Price increases are always a risk. If only a few customers are shopping in your store, reconsider your marketing strategy and don't change your prices.
Growing demand for products.
You never know what product might go viral, so keep monitoring search results for the products you offer. Analyze the volume of search demand and if you see the product being requested more and more often than before, consider raising its price.
Change your supplier.
Analyze prices on competitors' websites. If they offer a similar product at a lower price, it is worth finding out their terms and conditions with their suppliers.
Revenue, Product Range, and the Step Link Platform
The Step Link Platform allows you to rate products according to criteria specified by the customer and identify the range of products that will provide the most revenue. Based on this data, as well as on market trends and the competitive environment, Step Link experts will make recommendations for the product that is in the highest demand.