The past 15 years I’ve been selling online, focusing on what makes ecommerce work. I studied the eye-path of the customer, great web design, and the things that generally make a website successful in the online marketplace.
One of my focuses early on was pricing. Originally, I thought like everyone else in ecommerce that having the best prices online was required. It became clear that the larger companies and larger competition out there constantly beat the drum of traditional retail and traditional retail pricing schemes. And I must admit, early on I did to. I kept up with the sales of competition and make the necessary discounts in order to secure sales from customers who focus on price. And then it dawned on me.
What if I hired a [level-premier-free]programmer to write a script that would fetch all the prices of all the products from all my competition in real-time? Then I could adjust the prices of the products on-the-fly as customers pulled them up, giving them the best price in real time. Imagine if the website automatically did that and DID offer the lowest price on the Internet at any given time? That would be the solution to all pricing issues. Or so I thought. So, I interviewed programmers and did an enormous amount of research on how to actually implement this function. Considerations had to be taken for implementing such a best price structure and how it would alter our profits as well as the load on the server. Not to mention the marketing campaign that would surely follow – BEST PRICES in REAL TIME.
Keep in mind that I was analyzing this type of offering to the retail customer base at a time when shopping comparison engines were either in development or not in mainstream focus. So this was something that most people weren’t yet considering as a business model for online retail. And online retail was still in its infancy 12 years ago. New enough that most online commerce sites were still in the exploratory phase of pricing structures and determining profit margins.
Six months went by as I researched the issue. During those quick 6 months, I left the pricing alone on the website to reflect the manufacturers suggested retail price. And surprisingly, the business flourished! I think that is worth repeating. I left the pricing at manufacturer’s suggested retail, and the business Flourished.
In repeating that over the years, many people say that I probably lost business. I agree. In fact, a great deal of business was probably passed on to the competition. I probably will never know how much. But what I gained is a business model that is purely profitable and without all the unnecessary discounts and sales and the stream of responsibilities that go with that when one wants to show up in discounted shopping comparison engines. Another asset is a customer base that wants to spend money, not quibble about it. Pick the price point and stick with it. If the customer likes it they like it, if not they can go somewhere else. I know it goes against everything traditional retail, but we have used that business model for the past 12 years and successfully profited for our family.
Now it would be unfair if I did not clarify why the customers were willing to pay full retail value of the products we were selling.
- We provide great customer service.
- We provide a selection of products that are unmatched in the marketplace by most e-commerce websites and certainly by traditional retail stores.
- We offer a 100% money-back guarantee if they are not satisfied within the 1st 30 days. Of course, they lose out on shipping as with most stores–as that is not refundable.
- We also offer a price match guarantee, if they find it lower-priced somewhere else, we will match the price. In 12 years of doing volume sales, I have seen 3 customers utilize this guarantee.
- Our pages load in under 1 second sometimes 2 and that is critical when almost 47% of the internet may be still using dialup.
- Quick shipment of products
- Coupons, Brochures and something free with every order!
- A quick shopping experience on a website that is not bogged down by videos and flash or a website with a heavy footprint.
As our profit margins are so high, we are able to provide coupons and full-color brochures as well as something free with each and every order. We surprise our customers.
What we do for our customers is beat expectations. Despite traditional retail thinking for many many generations, price does not matter. And in an online marketplace, with the scalability factor of all the people on the Internet, you can and certainly will succeed selling online at all manufacturers suggested retail pricing.