With Amazon playing such a prominent role in how consumers shop, retail stores are constantly trying to find new techniques to improve business. Various tactics have done a great deal for many businesses that you can use, regardless of the industry. At the end of the day, a business needs to make money to stick around. Help take your business practices to the next level by learning about some of the best retail pricing strategies to increase profitability.
The first retail pricing strategy to increase profitability is competitive pricing. Given its namesake, this process involves looking at the product prices of competitors in your industry. Once you obtain this information, base your pricing on the findings. This method isn’t as simple as making your products cheaper than the competition. One way businesses practice competitive pricing is by accepting price match offers. This means that you are willing to sell your product at the same price as your competitor.
The next tactic many businesses use is psychological pricing. The goal behind the strategy of psychological pricing is to make the customer feel better about their purchase. Have you ever wondered why items usually end with .99 instead of just rounding up to the whole number? This is because our mind sees the .99 as being cheaper than a whole number. Another way of using psychological pricing is by using color to your advantage. This way, you can highlight items you want to sell as the colors draw consumers’ attention to a product. You can easily accomplish this by using colored price stickers.
Another method many businesses use to increase their profits is multiple pricing. Multiple pricing essentially means selling multiple products for one price. This is how many retail stores handle markdowns or sales. Plus, it’s common for customers to buy bulk. Multiple pricing gets consumers to spend more money on a product when it comes in a bundle—especially when the price isn’t much more than it is for one.