WooCommerce Dynamic Pricing – A Weird Way to Optimize Conversion Rates

May 20th, 2021 Comments off

Introduction to Dynamic Pricing

If you want your business to scale, you need to stay with the times. Nowadays, consumers are highly aware of the market and do their research on a brand before making a purchase. Thus, it’s important to be aware of the current online retailer trends to stay on top. One such common trend in today’s e-commerce competitive marketplace is dynamic pricing. Strategically adjusting the price of your product to match the current demands is a sure way to gain customers’ attention and make them choose you for their business.

So how does it work? Dynamic pricing curates prices for products by gathering large amounts of data regarding customer demand, competitors, and market conditions. So the prices are always changing depending on the market and time. This is especially beneficial for businesses related to traveling, e-commerce, transportation, etc.

But is it beneficial for consumers? Are there any disadvantages associated with it? And how to implement it? We are going to answer this and much more ahead, so keep on reading.

Dynamic Pricing Strategies

Dynamic pricing is available in multiple forms which you can implement depending on your business and product type:

1.    Time-Based Pricing

In the time-based pricing strategy, businesses can increase or lower the price of products based on their inventory available in their store or warehouse, date of release, and competitor price. Businesses can also use specific hours of a day to increase their sales, such as “happy hours” in a bar or offer same-day delivery with slightly higher prices.  

2.    Market-Based Pricing

Fluctuation in the market is a common thing and recent times have made us more aware of this than ever. Businesses would need to lower their prices if the demand decreases and increase the prices when demand is high.

3.    Segmented Pricing

Segmented pricing refers to setting different prices for the same product. This is done by segmenting the buyer into categories, such as prices that could be higher or lower based on location, delivery time, membership, high-value customers, and much more. You can also set prices for the services provided, such as faster delivery and quality. Through segmented pricing, everyone can afford your product on their terms.

4.    Penetration Pricing

Penetration pricing is perfect for new businesses who want to get noticed immediately. This strategy involves initially pricing the products and services at prices lower than those provided by the competitors. This results in increased visibility which helps startups gain the traffic they desire.

5.    Peak Pricing

Peak pricing is implemented when the demand is high and the competition is low. It is mostly employed during peak hours or seasonal sales where the products are priced dynamically to result in more sales. For example, during the holiday season, travelers buying airplane tickets normally see much higher prices than in non-seasonal time. 

There are many dynamic pricing plugins available that can set up different pricing strategies and analyze results to see which works best for your business.

Advantages and Disadvantages of Dynamic Pricing

Dynamic pricing can easily go sideways if not implemented property and thus along with advantages, it has few disadvantages as well. Let’s see if the pros outweigh the cons in this matter.

Advantages

1.     Increased Profit

By implementing dynamic pricing on your online store, you can benefit from increased sales and revenue. How? Because the machine collecting data to create a specific algorithm for your business makes sure your pricing is right. For example, if your competitor is selling the product for $3 and you sell them for $1. The dynamic pricing strategy will price your product at $2, which will be profitable for your business and also improve customer satisfaction as they believe they are getting a better deal from you.

2.     Knowing Your Competitors

Perfectly implementing a dynamic pricing strategy requires you to know your competitors. It is important to know what your successors have been doing. What are their prices? How do they price their products? When and how do they lower or increase prices? And much more. Once you have a clear view of your competitors, you can improve and implement these strategies seamlessly in your store.

3.     Customer Insight

The better you know your customers, the easier it will be to sell to them. Dynamic pricing provides you insight into your customer behavior, their shopping hours, their willingness to pay a price, their interests, and their demands. This helps you provide an optimum shopping experience to your customers and result in increased sales.

Disadvantages

1.     Increase in Competition

Dynamic pricing can easily get out of hand and start a price war. Now, what’s a price war? If a single business lowers its price to gain customers, similarly another business does the same and soon all other competitors follow which leads to incredibly reduced prices which are gaining no profit for the businesses.

2.     Distrust in Customers

These price wars lead to distrust in customers as well. How? If your loyal customers find out that someone else got the same product at half the price from another vendor, they will feel cheated. And no matter how loyal a customer is, a further reduced price is sure to get them converted to another business. 

To avoid these errors, make sure to have a perfect dynamic strategy in place and stay true to it because overdoing dynamic pricing could result in loss.

How to Implement Dynamic Pricing on your WooCommerce Store

There are many ways you can implement and integrate dynamic pricing into your online store. Setting up dynamic pricing cannot be done overnight. It is a long and laborious process of easing into the market, getting the customers, and increasing profit keeping the demand in view. Below we have mentioned a few strategies that you can implement on your site to properly enable dynamic pricing.

1.    Initial Pricing

As mentioned above, this pricing strategy is employed by new business owners, who introduce products at prices that are considerably lesser than the competitor. How? Because they take little profit at the beginning to gain customers and then once a strong client list has been established, the prices are gradually increased.

2.    Introduce Bundle Pricing

Another effective way to introduce dynamic pricing is by creating bundles. This is great for businesses that deal with clothes, food, sports equipment, etc. For example, an online store that deals with computers and their accessories, can bundle up a complete computer system and sell it for a slightly discounted price. This would help in increasing sales as your customers think they are getting a good offer and also increase the average order value. 

3.    Offer Discounts and Coupons

We all know customers love a good deal. Coupons and discounts are great for attracting the audience’s attention, but too much use of this dynamic pricing strategy could result in less profit, the difficulty of increasing the prices later on, and also makes your product seem cheap. Thus, it is recommended to occasionally and strategically place discounts depending on the need.

Final Thoughts on Dynamic Pricing

Dynamic pricing can be an ideal solution for the competitive e-commerce market, but it can also create customer mistrust in your brand  if misused. Thus, it is important to devise a proper strategy and work accordingly. Overdoing anything will have its consequences, such as running year-long discounts will give your customers the impression that your products are cheap or they won’t purchase when you increase the price. It is a continuous ongoing process and you need to improve and implement it on the way based on the supply and demand.

Stamps.com Connects Directly to WooCommerce!

Stamps.com’s direct integration with WooCommerce allows online retailers to easily import, manage, and ship your e-commerce orders. Benefits include:

  • Import order data directly into Stamps.com from WooCommerce
  • Print USPS and UPS shipping labels in one step
  • Automatically post back order and tracking info to your store

Make your WooCommerce shipping easier today by connecting your store to Stamps.com!

Author’s Bio

Xaviera Khalid is the content writer at WooKeeper.com. She is an avid reader and uses her creativity to write interesting articles about WooCommerce and its related topics. She focuses on SEO-optimized content and provides factual writing.

Categories: Ecommerce Shipping Tags:

Maximizing Profits on eBay: Four Hot Products to Sell Now!

May 7th, 2021 Comments off

Even though I am an eBay seller and educator with 16 years’ experience and 20,000 + feedback, I am constantly trying to think of ways to work smarter, not harder.  Last January, right before COVID hit, I decided to downsize and streamline my eBay business.  Instead of running it out of a warehouse, I moved it back to my house.  When social distancing became the norm, I started doing all of the listing myself instead of paying someone to list.  Because of all of these changes, I became laser focused on low-cost products that are easy to source, easy to store, and easy to ship.  As a result, I sell less but make more! 

The following four items are among the type of products I now sell on a regular basis.  If you don’t have much space, and you want to maximize profits in 2021, don’t miss out on these easy-to-source products:  

#1 Women’s bras and lightweight tops:  Both of these products meet the aforementioned criteria.  Heavily padded bras in all sizes from brands such as Victoria’s Secret are always hot sellers.  Be sure to mention style names in the titles of the listings you create.  Lightweight tops (especially camisole-type tank tops) from companies such as White House Black Market are also popular.  Bras and tops are easy to find at yard sales where they often hide in large piles of clothing and can be purchased for next to nothing.  In general, try to focus on those items that are light enough to be sent via First Class Package Service (under 1 lb.).

#2 Swimsuits:  Name brand swimsuits for men and women are also fun to sell.  Swimsuits are easy to store, and they don’t weigh much.  Focus on new or almost new name brand suits that are photogenic. As far as sizes go, the bigger the better.  A few years ago, I purchased 90 name brand swimsuits at an end-of-the-summer sale at a local thrift shop.  During COVID, there were no yard sales, and shopping at thrift shops was not an option.  That’s when I pulled out the bags full of swimsuits I had purchased!      

#3 Lego Minifigures: Legos can be sold by the pound, but did you know that Lego minifigures can be sold individually for a nice profit?  Minifigures (or minifigs) are small, lightweight figurines produced by the Lego company.  Both children and adults collect minifigs, and they are sold individually or as parts of sets.  Some are produced to fit a certain theme while others are specific characters from film, television, or game franchises.  We often purchase large lots of Legos and sift through them looking for minifigs.

#4 Vintage ashtrays and plates: I love listing vintage ashtrays and plates from bars, restaurants, and hotels, especially if the establishments no longer exist.  I recently sold a set of four small vintage dessert plates from a hotel for $60.  These treasures are relatively easy to find at estate sales and can be listed in just a few minutes from just about anywhere. 

eBay Seller Tip!  Remember, you make your money when you buy!  So when you’re out and about sourcing for your online business, don’t miss out on these small, lightweight, easy-to-source items that will help you maximize profits in 2021!

About the Author
Miriam Otto is an e-commerce blogger and credentialed teacher with 16 years’ experience selling on eBay.  She was a frequent guest on eBay Radio and has participated in eBay seller panels and projects.

Categories: Ebay Shipping Tags:

COVID-19’s Impact on USPS International Shipping Deadlines

October 22nd, 2020 Comments off

A typical year would have us just simply post the USPS holiday shipping deadlines and say “enjoy a great holiday shipping season”, but this year is like none other.

In my 20+ years of work with USPS international services I’ve never witnessed a more interesting year than 2020. I spoke with Kelley Martinez, Vice-President at RR Donnelly (a large international consolidator) and she agreed “It has been a very unique year with every day presenting new challenges. Volume surges during historically slower periods coupled with destination suspensions and resumptions with little notice has been both challenging and rewarding.” 

So, let’s have an honest conversation about 2020 “Peak” and what you really need to know about the international shipping deadlines for the 2020 holiday season.

Holiday Shipping Deadlines at First Glance

After reviewing the holiday shipping deadline (see table below) for major international markets, the USPS deadlines have not changed much from previous years. This is very interesting since postal and shipping carriers across the globe have seen delivery delays due to COVID-19 closures and increased residential delivery due to growth in e-commerce. 

First Class Package International Service201820192020
Africa1-Dec30-Nov30-Nov
Asia/Pacific Rim8-Dec7-Dec7-Dec
Australia/New Zealand8-Dec7-Dec7-Dec
Canada8-Dec7-Dec7-Dec
Caribbean8-Dec7-Dec7-Dec
Central & South America1-Dec30-Nov30-Nov
Mexico8-Dec7-Dec7-Dec
Europe 8-Dec7-Dec7-Dec
Middle East8-Dec7-Dec7-Dec
Priority Mail International201820192020
Africa1-Dec30-Nov30-Nov
Asia/Pacific Rim8-Dec7-Dec7-Dec
Australia/New Zealand8-Dec7-Dec7-Dec
Canada8-Dec7-Dec7-Dec
Caribbean8-Dec7-Dec7-Dec
Central & South America1-Dec30-Nov30-Nov
Mexico8-Dec7-Dec7-Dec
Europe 8-Dec9-Dec7-Dec
Middle East8-Dec9-Dec7-Dec
Priority Mail Express International201820192020
Africa8-Dec7-Dec7-Dec
Asia/Pacific Rim15-Dec14-Dec14-Dec
Australia/New Zealand15-Dec14-Dec14-Dec
Canada15-Dec16-Dec14-Dec
Caribbean15-Dec14-Dec14-Dec
Central & South America8-Dec7-Dec7-Dec
Mexico15-Dec14-Dec14-Dec
Europe 15-Dec14-Dec14-Dec
Middle East15-Dec14-Dec14-Dec

There are two challenges that we feel will have a significant impact on international parcel delivery during the holiday peak period.  After analyzing global parcel delivery over the last 120 days, we feel you should allow for 1-2 weeks of delay for peak this year. So, if take the most popular product by volume and destination (First Class Package International Service to Canada) and the USPS deadline provides a “mail by December 7” date, then I would try to have it out by November 30 to be safe.

Challenge #1 – COVID-19’s Impact on International Airplane Transportation

Many might not know, but those very planes you take to visit your Aunt in France are the same planes that deliver packages to other countries. Reduced routes because of COVID-19 means fewer flights and fewer flights means more packages being held waiting at transportation hubs. The situation became such an issue that USPS has resorted to ocean freight for parcels. If transportation is still limited during the holiday season, then we should expect continued delays from international transportation alone.

Challenge #2 – COVID-19’s Impact on Domestic Parcel Delivery

USPS has five international service centers located around the country in Los Angeles, San Francisco, Chicago, New York, and Miami. Depending on where you ship your package, your shipments will travel through one of these locations. To get your package to these locations, your shipments will travel on the very same network used for domestic shipments. Right now, USPS is experiencing an increase in domestic parcel delivery (up 46% in July 2020, compared to July 2019 according to data from ShipMatrix) and the holiday peak period is starting to look like a monster. If the domestic network gets clogged it will surely impact the speed of your international shipments to one of those processing centers.

Giving a Refresh on the USPS International Shipping Deadlines

I would start your Q4 seasonal sales promotions by at least two weeks earlier than previous years. By doing so it will allow a little more time to get your packages to your recipient and it will fall outside the typical holiday windows that will impact domestic and international transportation.

Should I Seek an Alternative Carrier?

Not necessarily. USPS still offers a very competitively priced product and with proper planning, you should be fine. Also, other alternatives are not immune to some of the same delivery issues and this year looks to be a challenge for all in the international shipping space. At GlobalPost, we try to address these impacts by using a mix of postal based services using USPS and other postal operators to provide the best possible postal optimized delivery experience. 

What is GlobalPost?

The GlobalPost delivery network leverages partnerships with international postal operators as well as commercial carriers to offer worldwide delivery. GlobalPost services reach over 200 countries and territories and include features not found in traditional international postal services. Get more info on International Shipping.

About the author

Shea Felix, General Manager – GlobalPost

With years of implementing global business solutions under his belt, Shea Felix brings distinct insights into the world of shipping. As the global shipping guru for Stamps.com, Shea inspires and empowers small businesses to take their services global. He is experienced in strategic planning and tactical execution, and has an exceptional understanding of product development, cross-border trade and logistics, e-commerce technology, website and mobile design, and global online marketplaces.

Categories: International Shipping Tags:

How to Provide Free Shipping This Cyber Monday

November 18th, 2016 Comments off

Stamps.com Blog Free Shipping

We are big fans of free shipping. Who wouldn’t be? Customers rave about it and it makes conversion easier for sellers. What’s not to love about that? So, imagine our surprise when we learned that offering free shipping during the biggest ecommerce holiday of the year does not significantly impact sales.

ecomdash Free ShippingThe numbers don’t lie. Customers appear generally more willing to pay for shipping on Cyber Monday than normal. But this contradicts traditional knowledge about the positive impact of offering free shipping on ecommerce sales. As business owners, you have a decision to make. Should you use this customer data to remove free shipping and increase your revenue on Cyber Monday? Some people would be extremely uncomfortable doing so, while others would just look at it as a smart business decision.

Luckily, there’s a third option. You can still offer free shipping, but make your customers to earn it. This allows you to maximize revenue from customers who don’t mind paying for shipping on Cyber Monday without punishing your returning customers who are used to receiving free shipping. Here are a few of the ways you can get your customers to earn free shipping on Cyber Monday.

Spend X Amount

This is one of the most common ways that online retailers chose to offer free shipping. Rather than giving every order free shipping, they incentive customers to spend more money to earn it. It’s a simple tradeoff that has been statistically proven to increase both sales and revenue.

Kissmetrics found that presenting a minimum threshold for free shipping on an ecommerce site increased conversion by 26 percent. Average order value increased by 5 percent. The most important part of the process is calculating what the minimum order value needs to be. Pro ecommerce sellers use the formula below to make sure they are getting the most bang for their buck on free shipping.

ecomdash MOV

Create an Account

There are tons of great guides for ecommerce email marketing that will increase your retention and strengthen your connection with your customers, but you can’t even begin email marketing if you don’t capture email addresses. Cyber Monday is likely to be your highest selling day of the year, and if you let it pass by without collecting as many emails as possible, you’ve lost a ton of momentum that you won’t be able to easily get back.

Having customers create an account to receive free shipping is a great way to get the most out of the Cyber Monday mob. Depending on the information you request when they create the account, you can also segment your email marketing based on their gender, age, and interests, ensuring that your marketing hours are being spent in the most effective way.

Add an Item

This method is especially effective if you have items in your store that aren’t moving as fast as other items. Allow your customers to bundle a related accessory with their purchase to earn the free shipping. You get a higher order value and clear up more inventory space. The customer in turn feels as if they’re getting more out of their order, and a discount on shipping.

The item you choose to bundle should be something that a customer would need to go with their new purchase. If you’re selling guitars, your add-on item could be guitar strings or picks. If you’re selling makeup, you can bundle compact mirrors. This makes you look like you care about the buyer beyond their initial purchase.

Share Purchase on Social Media

There are tons of benefits to creating and maintaining a community of your customers on social media.

– Gives you an opportunity to humanize your brand
– Centralizes customer reviews that help new buyers convert
– Raises search engine ranking by adding to your link network
– Allows your customers a location to gather and form a culture surrounding your brand
– Provides a simple venue for quick customer feedback

That’s all easier said than done. Building a social media audience is not simple. One way to kick-start it is to incentivize your customers to share your brand on social media by offering them free shipping in exchange for hitting the share button. It supercharges your social presence by demonstrating that customers excited about your products. Not only have your customers showed off your brand to all their followers, but you now have access to your customers’ accounts.

Final Thoughts

The benefits of offering free shipping can’t be ignored. It keeps customers happy and increases conversion rates. But we also can’t ignore the raw data and revenue opportunities provided to us by Cyber Monday. This is one case where you can truly have your cake and eat it too. However you choose to allow customers to earn free shipping during the ecommerce holiday, make sure that it gives you key assets such as emails or an increased social presence. This allows you to capture momentum from the selling season and carry it with you into 2017. Harness your success and build upon it for the future. Now that’s an incentive we all want to earn.

Dion BearyAbout the author: Dion Beary writes about ecommerce for ecomdash, an ecommerce automation software system. He has more pairs of Chuck Taylors than any one person needs.

 

How To Offer Customer Service Through Your Order Fulfillment

June 15th, 2016 Comments off

sdc_ShippingStrategyCustomerServiceTo run a successful business, you need to have great customer service. While brick-and-mortar stores capitalize on the face-to-face communication we often associate with customer service, online businesses can still master the art of communicating with their customers – namely, through their shipping process. Here are five ways to master customer service by improving your shipping strategy.

1. Be clear about shipping expectations
Negative feedback is overwhelmingly related to issues associated with shipping. To hedge your bets and negate this, provide very realistic expectations for when an item should arrive. Be transparent, and explain the difference between shipping (when an item leaves your possession or warehouse to begin its journey to the customer) and delivery (when the package arrives on the buyer’s doorstep). During high-volume times like the holidays, provide a shipping time table that lets buyers see how soon they need to order packages to expect them by Christmas. Always try to get items to the Post Office the day the order was placed or within 24 hours, if possible. If and when packages show up early, buyers will be pleasantly surprised and more likely to leave positive feedback.

2. Include a custom packing slip
Marketplaces like Amazon have strict rules on how you can contact and interact with a buyer. The packing slip is a safe way to connect, and can help personalize the buying experience. Write a brief note within the packing slips thanking buyers for their patronage, letting them know that they are welcome to contact you, if necessary, and leaving the best method of contacting you. This will reassure buyers that you care, and that you’re just a phone call or email away should they need to reach out. The best packing slips I’ve seen also include a handwritten thanks with the signature of the employee that packaged my item. A reported 68% of customers will stop supporting a business if they feel that the company is indifferent towards them. Bring some humanity to the shipping experience and let buyers know you care.

3. Offer a discount for their next purchase
Discounts and coupons encourage repeat salesand demonstrate that you appreciate a customer’s business. As always, you must abide by each marketplace’s rules when offering discounts or coupons. It is legal to extend a discounted offer, but you cannot do so in exchange for positive feedback. A coupon for their next purchase may encourage feedback organically, but you can’t use it an as incentive.

4. Brand your packaging
The more you can make your buyers’ shopping experience stand out, the better. A 10-year study found that brands that can evoke an emotional connection with buyers can effectively charge up to 200% more than competitors. Branding your packaging will contribute to this. If you sell on your own website, you have free rein to package as creatively as you like. That said, you can still offer a unique experience on stricter marketplaces. After you have the appropriate packing materials, like bubble mailers or sturdy boxes, what can you add to set yourself apart from competitors and create a fun experience for customers? What unique addition would make sense with your brand persona? I recently ordered balloons from a small, party supplies seller on Etsy. When the package arrived, I opened the bubble mailer and confetti came out. It was fun, surprising, and totally consistent with the brand. Creating a genuinely fun shipping experience for me set this seller apart from her competitors, and demonstrated to me that she thinks about her customers from start to finish. I loved it, and I will definitely purchase from her again.

5. Make all returns free
We know not every seller is able to make free shipping work with their budget. Free, unconditional returns is a great alternative to offering unlimited free shipping, and benefits the customer and retailer alike. Here’s why:  a reported 49% of consumers believe shipping costs to be the most exasperating aspect of returning an item. Another 88% of consumers would rate free return shipping as either “important” or “very important” when making purchase decisions, and 82% of another test group affirm that they would complete an online purchase if the seller offers free return shipping. Making returns easy and free for the buyer is a great way to nail customer service and promote buyer trust. And if a buyer does make a return, they are more than likely going to shop from you again in the future, if your return shipping is free.

Offering exceptional customer service through your shipping process doesn’t just impress customers – it encourages future purchases, stewards repeat buyers and helps you win out over competitors. Get creative with branding, be generous with returns and communicate with buyers that you’re a reliable and considerate retailer. If you can nail this, you will reap the benefits. Happy selling!

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