Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
What type of pricing strategy for building website traffic?
- Discount Pricing
Consumers love sales, coupons, rebates, seasonal pricing and other promotion-related markdowns – i.e. getting a bargain.
Pros: great for attracting a larger amount of traffic to your online store and getting rid of out-of-season or old stock, whilst attracting a more price-sensitive group of customers.
Cons: if utilised too often, you gain the reputation of a bargain retailer, which could detract consumers from purchasing your products for the "normal" price.
- "Keystone" Pricing
Essentially, this is when an online retailer simply doubles the wholesale cost they paid for the product to determine the selling price. There are however a number of scenarios in which keystone pricing may be too low or too high for your business.
For instance, if you have products that have a slow turnover, have substantial delivery and handling costs, or are unique and/or scarce then you might be selling yourself short - and could possibly get away with an even higher markup. However, if your products are easily available elsewhere keystone pricing may not be right for you.
Pros: works as a quick-and-easy rule of thumb that ensures an ample profitability margin.
Cons: depending on the availability and how competitive a product is, it’s usually unreasonable for an online retailer to mark up a product that high.
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