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Why You Need to Improve Your eCommerce Pricing Strategy
Improving your pricing is a fantastic way to multiply profits.
The most often cited study comes form the Harvard Bu cell phone lists siness Review . It shows a 1% improvement in pricing yields an average 11.1% increase in profits!
That study was performed in 1992. Since, pricing has become a field of study, with a number of research projects validating pricing's effect on profitability.
One example comes from Austin Startups, which examined a portfolio of 75 companies across industries. They found that "a 1% pricing improvement delivered > 15% potential increase in operating profit."
In 2010, McKinsey & Company released The Price Advantage which showed improvements in price outperformed similar improvements in any other aspect of the business, from reducing fixed costs, variable costs, or even increasing sales.
Value Pricing Strategy: The Best Pricing Strategy for eCommerce
Within pricing strategy, there are a number of options. There is skim pricing, penetration pricing, neutral pricing, cost basis plus pricing, competitor pricing, and more.
Why You Need to Improve Your eCommerce Pricing Strategy
Improving your pricing is a fantastic way to multiply profits.
The most often cited study comes form the Harvard Bu cell phone lists siness Review . It shows a 1% improvement in pricing yields an average 11.1% increase in profits!
That study was performed in 1992. Since, pricing has become a field of study, with a number of research projects validating pricing's effect on profitability.
One example comes from Austin Startups, which examined a portfolio of 75 companies across industries. They found that "a 1% pricing improvement delivered > 15% potential increase in operating profit."
In 2010, McKinsey & Company released The Price Advantage which showed improvements in price outperformed similar improvements in any other aspect of the business, from reducing fixed costs, variable costs, or even increasing sales.
Value Pricing Strategy: The Best Pricing Strategy for eCommerce
Within pricing strategy, there are a number of options. There is skim pricing, penetration pricing, neutral pricing, cost basis plus pricing, competitor pricing, and more.