Last updated - September 28, 2018
The pricing strategy of your eCommerce store determines your ability to attract customers. It is important to maintain your product prices at a level capable of attracting customers of all strata. In fact, product pricing is one of the predominant factors that influence purchase decisions. WooCommerce core features allow creating simple sale prices, as well as different prices for variations. However, when you talk about pricing strategies that are more aligned with recent trends, you may need some additional tools. For example, dynamic pricing is a highly popular pricing strategy that is being used by online businesses of all sizes. This article looks at some of the ways to create an effective WooCommerce pricing strategy. It will also provide you with some good options to extend the pricing features of WooCommerce.
How to devise a pricing strategy for eCommerce?
Fundamentally, when you want to set a price for your products, you are looking at the possibility of making a profit. At the same time, you want to give a decent deal for your customers. It is by no means an easy task to set a price that fulfills both. Moreover, you need to consider the expenses related to order fulfillment as well. Let’s look into the basic strategies that are commonly used by eCommerce store owners across the world.
Base your price on the cost of your product
This is a pricing strategy that you can adopt without tedious research on the market trends. When you are just starting out with your WooCommerce store, it might be a good one to follow. Basically, here you simply calculate the total cost of a product on your store and add a profit margin to it. The resulting amount will be the price of the product. The cost will include the money you spent to procure the product, any modification expenses, and the shipping charges. You can decide on a reasonable profit margin, and then you are set.
An advantage of this type of pricing is that you will be able to avoid plunging into losses straightaway. However, if you are not doing market research, there are two apparent risks in this pricing strategy. One, you probably have set the profit margin too low, and let go of the chances to make more money. Second, your product prices are relatively higher, and you are not able to significantly improve the customer base. As you can see, as an eCommerce store owner, you may have to spend more time in studying the market and customers. Still, if you are just starting out, or you only have a few specialized or niche products, you can try out this strategy.
Look at your competition for pricing
This is again a simple strategy that you can manage with minimal research. And it is more applicable when you are in a marketplace with multiple competitors selling the exact same product. If the same product is available at a lower price from a different vendor, naturally more sales will go that way. So, you will be forced to cut down your profit margin, every time a competitor decides to reduce their prices.
You might need to use this strategy in different phases of your business. However, it is not something that you can rely on for the long term. When you are starting out, and you are not quite familiar with the market, this might help you to get a hold of things. At other times, aggressive competitor enabled pricing might burn your profits. With efficient tools available to analyze purchasing power and patterns of customers, you may want to try a more dynamic approach.
Set a dynamic price based on multiple factors
This is one of the popular strategies used by many eCommerce stores of all sizes. Basically, here you don’t just set a price that is offering you a good margin. Instead, you do a thorough research on market tendencies and customer shopping patterns. It is not simple to set a price using this strategy, as you may have to price a product according to the perceived value of the product.
For example, if you are selling winter clothing, your products definitely will have increased demand during the season. However, you may still be able to target the audience who are preparing for winter too. So, during other seasons, you have the scope to sell winter clothing at a price lower than usual. This is just a basic example, but store owners across the world are using strategies that are much more complicated to get similar results. Instead of changing prices seasonally, there is store that changes prices many times in a single day!
Keenly following the buying pattern of your customer base is a definite requirement for setting up dynamic prices. Based on your analytics insight, you will be able to revamp your strategy every now and then. Some of the WooCommerce dynamic pricing plugins help you set up a comprehensive pricing strategy with multiple considerations.
WooCommerce pricing plugins to help set up a robust strategy
To set up advanced pricing systems on WooCommerce, you may have to rely on extensions. For example, a dynamic pricing extension would help your store to have a flexible pricing pattern. This should help in improving customer satisfaction and profitability simultaneously. Let’s look into some of the best WooCommerce pricing extensions that are popular among store owners.
Dynamic Pricing
This WooCommerce extension helps you create discounts based on quantity and order value. You can choose to enable a dynamic pricing strategy based on fixed amounts or percentage values. Even offer discounts only to specific customers by making use of WooCommerce user roles. The quantity-based rules can be determined based on multiple parameters. These include cart quantity, line item, individual variation, categories, etc. The extension is great when you want to encourage customers to purchase more from your store. A simple example would be when you offer a discount on a product when a customer purchases five of it.
Fluid pricing system for categories and user roles
Similarly, you can set a dynamic pricing rule for categories. This will broaden the scope of discount. So, instead of making quantity based price adjustments, you can make them for an entire category. This way, customers purchasing multiple numbers of products from the same category will gain the advantage of the adjustment. In addition to this, you can also set simple category-based adjustment, which applies to all products in the category. Customers buying any products from that specified category will be eligible.
Another advantage of this extension is simple role-based pricing, where you can set an exclusive pricing system for specific user roles. For example, you can give a 10% discount to all customers who enroll for a special membership plan on your store. Overall, this extension provides great assistance if you are considering to set up a flexible pricing method on your store. A single site subscription of the extension would cost you $129. You can get hold of 5 sites and 25 site versions at $199 and $299 respectively.
XAdapter Dynamic Pricing and Discounts
This plugin is an excellent option if you are looking to set up an effective pricing strategy for your WooCommerce store. The detailed pricing table enables you to configure various price adjustment rules with ease. At the same time, you will get a detailed view of various offers and adjustments running on your store at a given moment. On top of that, the plugin provides an option to set a maximum discount limit for every price adjustment rule that you use. This way, you can make sure the adjustments won’t lead you to losses.
Great features to accommodate innovative pricing ideas
The plugin offers a plethora of features that can handle almost every other pricing pattern that you can think of. It helps to display a pricing table on the product page. This enables your customer to be aware of all the possible offers on that product. It is pretty clear that these sort of features would really enhance the customer experience on your store. In case of multiple rules being applied to the same cart, the store owner has the control to choose. Three options – ‘Best discount’, ‘All match’, ‘first match’ – helps you determine which rule to apply in such a case. Moreover, you can easily change the order in which the rules are applied.
This plugin offers multiple scenarios to offer discounts to customers. You can set a discount based on purchase date, category, quantity, weight, price, etc to talk in simple terms. In addition, you can set discounts based on number or order value of previous purchases. This is an excellent option to ensure repeated purchases on your store. You will be able to set up price adjustments based on products, variations, user role, email, and various cart parameters.
Flexibility in every move
The plugin offers excellent flexibility in terms of setting up your price adjustments. If you want to exclude one or two products from an already defined cart or category rule, you can do so easily. In addition, you can combine multiple products and offer an individual or collective discount on the combo. This is particularly useful in cross-selling strategies where you can push a slow-moving product easily. Moreover, you can set ‘buy one get one free’ (BOGO) offers without complexities. And, interestingly, once you set the BOGO rule, the free product can be added to the cart automatically.
Dynamic Pricing and Discounts plugin also helps to customize the pricing format for variable products. If you want to add a text like “Starting from” before the price, you can do so. You can even repeat a rule in a group. For example, every three items a customer purchases, you can offer a discount. With extensive features like these, XAdapter Dynamic Pricing and Discounts plugin is one of the best in its category. You can buy a single site license for $69. If you are looking for a 5-site license, you can get it for $99 and a 25 site license would cost you $199. Adding the outstanding support reputation of XAdapter to the mix of things, and you have an easy choice in front of you! And if you are not ready to purchase yet, try out the free version.
Pricing Deals by Vark
This is a great option if you are trying to set up varied pricing options on your store. The free plugin helps you set up dynamic pricing discounts for retail and wholesale deals. You can customize various strategies according to the unique business case that you encounter. With the help of this plugin, you can set up bulk discounts, buy one get one deal, catalog pricing and more. In addition, you have the option to apply price adjustments directly on the price of the item or as a coupon applied automatically. Moreover, the plugin helps to display a promotional copy from the specific rule on your site. This can be something catchy like “Offer only for today”, to create a sense of urgency in customers.
You can apply various discount types such as percentage deals, or fixed price applied individually or in a group of products. In addition, bulk pricing can be set up in a single rule. With over 7000 active installs and close to 120 five star ratings, this plugin is sort of a star in its category in the WordPress Plugin repository. There is a pro version too with advanced features, which we will discuss more in another article.
Conclusion
Your pricing strategy is one that makes or breaks your business. Thankfully in the present scenario, pricing is not a static component anymore. You have abundant resources that you can use to set up innovative pricing strategies for your store. These can be kept in an ever-evolving, fluid model that adjusts to changing trends. WooCommerce pricing strategies too are quite flexible with multiple plugins offer creative options. These options continuously keep an eye on your profit scales, while ensuring the best experience for your customers. This article covered some of the fundamental pricing strategies that you need to know in eCommerce retail. And you also got a glimpse on some of the best plugins in WooCommerce for dynamic pricing. Let us know if you have a query or an insight to share.
