Pricing Strategy 1: The Cents Pricing Strategy
This is a strategy that works based on how the human brain processes numbers. Research has shown that people pay more attention to the left-hand digits of a number, especially those before the decimal point. This means that for a product price, customers will likely concentrate on the ‘dollars’ and neglect the ‘cents’. Take a look at the image below to see what I mean: So let’s say you are intending to price a product for $49. Change it to $49.99 instead. Your customers will perceive the price as $49, even though it is nearer to $50 actually. They may be more willing to buy your product, thinking that they have got a good deal. And you can earn that extra $0.99 from each sale you make! Little as it is, don’t underestimate the profits you can gain from this method. Imagine: if you sell 10 units of your product per day, you will be earning $9.90 more per day. As your sales accumulate, these ‘extra’ profits can snowball into a significant amount! Meanwhile, here’s an interesting observation I made when applying this strategy. Most of the time, those prices that end off with a ‘9’ digit will be much preferred. For example, if you price a product at $49.27 compared to $49.99, more customers will buy it at the latter price. This is even though the previous price is much cheaper! You can try it out to see if this works the same way for you too.Pricing Strategy 2: Price Above the Amazon Free Shipping Order Amount
As a shopper on Amazon, one of the biggest concerns will definitely be paying for shipping fees. The shipping fees can rack up the actual amount of money a customer needs to pay to get your product. And most of the time, customers will get irritated by this. After all, no one will be delighted to pay so much more on top of a product’s actual value! But there is a get-around method to this situation. In case you don’t know yet, Amazon provides free shipping for orders above USD25. Otherwise, customers will have to pay for shipping charges of minimally USD5-6. As a seller, you can help your customers avoid this by increasing your product’s price to above USD25. Doing so not only allows you to make more money, but your customers can save more too! Some of you may be confused here: “Huh? I increase my product’s price, but my customers can save more? Are you kidding me?” But nope, I am not kidding you. Let me do the calculations for you. Let’s say there is a product at USD23. This means the actual amount of money customers have to pay will be at least USD28, for they have to add on the USD5 shipping fee. Compare it to another similar product priced at USD26 – at that price, there are no shipping fees to pay. Many people are quick to realize that they would have enjoyed a “bargain” for the latter deal. As a customer, which of the products do you think you are more likely to buy? In general, pricing above the Amazon free shipping order amount is always a good strategy. Do note that different Amazon marketplaces may have differing free shipping order amounts. So, please check carefully before you list your products!Pricing Strategy 3: Apply Discounts
Now, it’s a fact that people love discounts. Many studies show that offering discounts are often more effective at attracting sales than anything else. After all, who wouldn’t want to believe that they got a good bargain? As such, you may want to make use of this human psychological trigger when you are pricing your products. On Amazon, you can add discount coupons to your listings to entice your customers. Just go to ‘Create a new coupon’ under the ‘Advertising – Coupons’ section to add coupons for customers to use. Or else, you can choose to work “outside of Amazon” – by collaborating with influencers, for example. You can provide special discount codes for the influencers’ followers to use when they buy your products. They can key these codes under the ‘Add a gift card, promotion code, or voucher’ section when carting out on Amazon. In either case, both will get you the same results: happier customers and more sales! Meanwhile, here are some useful tips you can use when creating your discounts.Tip 1: Design Clean-Cut Discount Structures
Using clean-cut discount structures is always a good idea. By this, I mean setting up discount amounts that divide well into the original selling price. For example, if the price is $30, then a $3 discount will be good. That’s exactly one-tenth of the total price, and it’s very easy to calculate. The same goes for even numbers – if your price is an even number, use even numbers when setting up your discounts. Doing so will allow customers to understand how much they can save at one glance. And anything that helps customers will help to boost your sales!Tip 2: Use Percentages
There are many ways in which a discount can appear. You can offer percentages off, like 30% off; or offer a monetary amount, like $3 discount. But I will always recommend using percentages when designing your discounts. Let me explain. For example, you have a product priced at $20. The maximum amount of discounts you want to let your customers enjoy is $5. There are two ways you can present this as: 1. $5 off $20 2. 25% off $20 When reading the two options, do you notice that the second one seems like a bigger discount? This is because the figure ‘25’ is a larger number than ‘5’. Subconsciously, customers will see “25% off $20” as a better bargain, even though both are the same! As such, using percentages off will always be more favorable than using fixed monetary amounts. Try it out for yourself! I hope you have gained some insights about how to price your products from this post. If you are interested to know more about such strategies, stay tuned and continue following me!Selling on Amazon is not easy. There are many things you have to take note of, and one of the most important things is how you price your products. Price it wrong, and you’ll either not make any sales, or be selling at a loss.
In this post, I will introduce you to a few types of pricing strategies that you can use on your Amazon products. Do apply them so you can get more profits. After all, every little bit counts!
Pricing Strategy 1: The Cents Pricing Strategy
This is a strategy that works based on how the human brain processes numbers. Research has shown that people pay more attention to the left-hand digits of a number, especially those before the decimal point. This means that for a product price, customers will likely concentrate on the ‘dollars’ and neglect the ‘cents’. Take a look at the image below to see what I mean:
So let’s say you are intending to price a product for $49. Change it to $49.99 instead. Your customers will perceive the price as $49, even though it is nearer to $50 actually. They may be more willing to buy your product, thinking that they have got a good deal. And you can earn that extra $0.99 from each sale you make!
Little as it is, don’t underestimate the profits you can gain from this method. Imagine: if you sell 10 units of your product per day, you will be earning $9.90 more per day. As your sales accumulate, these ‘extra’ profits can snowball into a significant amount!
Meanwhile, here’s an interesting observation I made when applying this strategy. Most of the time, those prices that end off with a ‘9’ digit will be much preferred. For example, if you price a product at $49.27 compared to $49.99, more customers will buy it at the latter price. This is even though the previous price is much cheaper! You can try it out to see if this works the same way for you too.
Pricing Strategy 2: Price Above the Amazon Free Shipping Order Amount
As a shopper on Amazon, one of the biggest concerns will definitely be paying for shipping fees. The shipping fees can rack up the actual amount of money a customer needs to pay to get your product. And most of the time, customers will get irritated by this. After all, no one will be delighted to pay so much more on top of a product’s actual value!
But there is a get-around method to this situation.
In case you don’t know yet, Amazon provides free shipping for orders above USD25. Otherwise, customers will have to pay for shipping charges of minimally USD5-6. As a seller, you can help your customers avoid this by increasing your product’s price to above USD25. Doing so not only allows you to make more money, but your customers can save more too!
Some of you may be confused here: “Huh? I increase my product’s price, but my customers can save more? Are you kidding me?” But nope, I am not kidding you. Let me do the calculations for you.
Let’s say there is a product at USD23. This means the actual amount of money customers have to pay will be at least USD28, for they have to add on the USD5 shipping fee. Compare it to another similar product priced at USD26 – at that price, there are no shipping fees to pay. Many people are quick to realize that they would have enjoyed a “bargain” for the latter deal. As a customer, which of the products do you think you are more likely to buy?
In general, pricing above the Amazon free shipping order amount is always a good strategy. Do note that different Amazon marketplaces may have differing free shipping order amounts. So, please check carefully before you list your products!
Pricing Strategy 3: Apply Discounts
Now, it’s a fact that people love discounts. Many studies show that offering discounts are often more effective at attracting sales than anything else. After all, who wouldn’t want to believe that they got a good bargain? As such, you may want to make use of this human psychological trigger when you are pricing your products.
On Amazon, you can add discount coupons to your listings to entice your customers. Just go to ‘Create a new coupon’ under the ‘Advertising – Coupons’ section to add coupons for customers to use. Or else, you can choose to work “outside of Amazon” – by collaborating with influencers, for example. You can provide special discount codes for the influencers’ followers to use when they buy your products. They can key these codes under the ‘Add a gift card, promotion code, or voucher’ section when carting out on Amazon. In either case, both will get you the same results: happier customers and more sales!
Meanwhile, here are some useful tips you can use when creating your discounts.
Tip 1: Design Clean-Cut Discount Structures
Using clean-cut discount structures is always a good idea. By this, I mean setting up discount amounts that divide well into the original selling price. For example, if the price is $30, then a $3 discount will be good. That’s exactly one-tenth of the total price, and it’s very easy to calculate. The same goes for even numbers – if your price is an even number, use even numbers when setting up your discounts. Doing so will allow customers to understand how much they can save at one glance. And anything that helps customers will help to boost your sales!
Tip 2: Use Percentages
There are many ways in which a discount can appear. You can offer percentages off, like 30% off; or offer a monetary amount, like $3 discount. But I will always recommend using percentages when designing your discounts. Let me explain.
For example, you have a product priced at $20. The maximum amount of discounts you want to let your customers enjoy is $5. There are two ways you can present this as:
1. $5 off $20
2. 25% off $20
When reading the two options, do you notice that the second one seems like a bigger discount? This is because the figure ‘25’ is a larger number than ‘5’. Subconsciously, customers will see “25% off $20” as a better bargain, even though both are the same! As such, using percentages off will always be more favorable than using fixed monetary amounts. Try it out for yourself!
I hope you have gained some insights about how to price your products from this post. If you are interested to know more about such strategies, stay tuned and continue following me!