Even when you’re offering the best possible products, you’re not assured of good returns. In e-commerce, things are even worse – because a lot of your competitors are, too, offering the same products and in same “high” quality. This is where devising a unique and smart pricing strategy becomes so very important. It’s one of the key ways how you can outdo high market competition and bring more sales.
Now, of course, devising such a pricing strategy is easier said than done. But wait: it doesn’t have to be so very difficult.
When Sam Walton started Walmart, one of his many key strategies was to leverage retail arbitrage. The strategy, in its refined form, is plain and simple. You sell products at the lowest possible price. This will automatically boost your sales. And higher sales will eventually make up for the profits that you’re giving up for keeping the selling price so low. Here, your sales are the driving force of your profits and not necessarily your selling price.
This model works well and fine even today. And, in fact, it is one of the simple strategies that many top e-commerce businesses still deploy grow. How do you think all those online retail stores manage to survive even with such high discounts during the festive seasons? That’s because they sell in large quantity which (easily) covers the possible profits that they are giving up in discounts.
And this is a model you can take up too. Instead of solely relying on your marketing strategies and hoping customers come to you, you can lower your price significantly. And when you’re selling at the cheap price the same quality that everyone else is offering, you can improve your sales instantly.
Sure, lowering your selling price would mean risking your profit margin. But in this ultra-competitive market, unless you can spare a lot in marketing and branding, this is an essential risk you have to take. But, fortunately, there exists a simpler way to minimize the impact of this risk. Instead of purchasing your wholesale from the manufactures or distributors, you buy your bulk from online liquidation stores.
In recent times, the demand for wholesale liquidation companies has surged to new heights. And rightly so. A handful of these wholesale liquidators have significantly up their game, expanding their warehouse and offering discounts of as much as 90 percent. So, you can simply purchase your bulk from such online liquidation stores at the super-cheap price and sell to your customers at a much lower price, all the while cutting sufficient profit margin.
Take up this simple pricing strategy and give your e-commerce business the wings to fly high.