WooCommerce Product Price: Top 10 Intelligent Strategies To Sell More!

26% of total businesses consider the market and competitors when setting their product prices.

Online businesses are close to the limit of their product pricing endurance. To price a product is like planning a balanced diet with all minerals, vitamins, proteins, carbs, fats, etc. A balanced WooCommerce product price includes a perfect combination of price per quantity, discounts, and profits.

Many believe that pricing a product is all about numbers and calculations. Hence, to price a product with a calculative approach is the most common practice. However, pricing a product also majorly depends on the customer’s preferences and their decision-making psychology.

Customer psychology differs for different products. Also seasonal sales, loyalty mapping, community pressures, etc. – all impact the sales count of the product because these various campaigns twist the prices differently.

In this blog further, we shall be discussing and learning more about how to price a WooCommerce product. Also, we’ll have a look over some commonly adopted pricing strategies for analyzing and setting WooCommerce product prices.

Let’s proceed…

What is WooCommerce Product Price?

Every product on your WooCommerce store includes a price, either regular or discounted. This price is, also, often referred to as WooCommerce Product Price.

How To Get WooCommerce Product Price?

WooCommerce allows you to show regular and sale prices for each product available in store. To set a WooCommerce product price, you may follow the following steps –

1. Login to your WordPress dashboard.
2. Go to Products > Add New.
3. Add product name, product description, and scroll down to add the product price and other additional information regarding shipping and taxation, etc.
4. Once done, click on “Publish” to showcase the product and its price on the shop/category page.

Although it is fairly easy to set the WooCommerce product prices, managing discounts/coupons on WooCommerce can still be a tedious task.

Therefore, the use of plugins like “Discount Win-wheel for WooCommerce” or “Discount Rules for WooCommerce” is highly recommended and helpful to plan and set up a pricing strategy.

What Is a Pricing Strategy & Why It Is Important?

It may surprise you that offering discounts and offers on products is a very strategic move planned in order to increase the sales count of the product without hindering the profit ratios. In brief, pricing strategy is a blueprint for any business to help them decide the best price for their products. The pricing strategy is inclusive of the base price for the product, labor, marketing expenses, and profit share for the shareholders.

A well-planned pricing strategy is a must for any business in order to –

• Sell products at worth price
• Scale profit margins
• Gives advantage in a competitive market share

10 Best WooCommerce Product Price Strategies

eCommerce pricing is the basic criteria affecting the customer’s buying decision. And to your surprise, setting up WooCommerce price is the most complex and hectic part of running the business. Tracking your WooCommerce product prices and analyzing competitor’s every move will help you plan your product sales and also in understanding what customers consider before they make a purchase. Hence, there is no harm in being strategic to plan your WooCommerce product prices.

Product Pricing Strategies

1. Retail Price: A Simple Markup Formula for WooCommerce Product Price

It is considerably noted that many physical store retailers essentially believed in folding their product’s prices twice the initial price to sustain a healthy profit margin.

There are many factors affecting the pricing strategy. However, this WooCommerce product price strategy doesn’t account for any fixed or constant strategy process. Every business is unique in its own way, so are its products and their prices.

You may use the following formula to calculate the Retail Prices:

Retail price = [cost of item ÷ (100 - markup percentage)] x 100

Let’s lookout for an example to understand this formula better. Suppose you have a product with a cost price of $10 aimed at 40% markup. So the retail price for the product, according to the formula, is –

Retail price = [10 ÷ (100 - 40)] x 100
             = [10 ÷ 60] x 100 = $16.66

Since common pricing practice is to round off the decimal pricing to the whole pricing unit. Therefore, the retail pricing for the above example can be either $16 or $17, whichever suits the retailer best.

2. Manufacturer Suggested Retail Price(MSRP): A Time Savior Approach

MSRP or Manufacturer Suggested Retail Price is the recommended product price from the manufacturer. The origin of this strategy was to standardize the variable prices across different locations and retailers. The matter of fact here is that MSRP works best for highly standardized niche products like electronic appliances.

WooCommerce retailers however have the freedom to price the product in a way they want to. But the wider difference between the MSRP and retail price may result in deviation from the sales predictions. This may also lead to supply agreement infringement or discontinuing relationships with MSRPs.

Also, following WooCommerce MSRP pricing limits the competition on price as the suggested price options are the same for all retailers at all locations. And hence it saves a lot of time for the retailers when pricing the products.

3. Keystone Pricing: “Thumb-Rule” for A Reason

This WooCommerce product price strategy is popular among the retailers as a simple “Rule of Thumb”. Keystone pricing is determined by just doubling the base price of the product.

Because the prices are folded twice the base price, often it may result in scenarios with either price being too high or too low. Although keystone pricing ensures a higher profit margin. But, they may result in short selling in case of slow turnover products while it will be harder to pull more sales in case of higher commoditized products. Moreover, the success of the keystone pricing approach for WooCommerce product pricing solely depends on the market demand of that product.

4. Product-Bundle Pricing: Combos Attract Better Deals

Product-bundle pricing or multiple pricing strategies empowers the retailers to sell more than one product clubbed together for a single price. It is a common practice followed by many grocery outlets and food joints (like McDonald’s, Burger King, etc.). This practice of selling bulk products at a single price is also adopted by the apparel stores.

You must have come across product bundle packs, for example, a pack of three pair socks or t-shirts is a classic example of multiple/bundle pricing. Upsell and cross-sell are also a major supporting concept for this WooCommerce product pricing approach.

The product-bundle pricing strategy approach creates an illusion for customers where they believe to get higher-value products for a lower cost. However, the product-bundle approach minimizes the profit margin as the products are grouped together and so are their prices.

A value-pack offers tend to increase sales by 73% – economist.com

5. Loss-Leading Pricing: A Perfect Derivation of Market-Basket Analysis

This WooCommerce product pricing approach is very much inspired by the Market-basket analysis. For those who are not familiar with Market-Basket analysis, it is a process to analyze which products complement each other. This analysis works best in order to increase the sales for the individual product by pairing it with its complementary product.

You must have seen the recommendations on online stores saying – “people who bought this also purchased that”. If not, you must have experienced how you went in store following a lucrative discount offer on a particular product and how you came out with many other products in hand as well.

A loss-leading pricing strategy basically allows the pricing manager to run an offer on a particular product. And when the customers move in to avail the offer, encourage them to buy the complementary additional products as well. Even if the profit margin reduces for the discounted products, the seller has the opportunity to cover up for the same in the upsell/cross-sell products.

This WooCommerce product price strategy can work wonders for retailers as it has great potential to boost the per-customer-sales rate. However, you can’t always prefer to go with this approach in order to increase sales. Offering discounts regularly may degrade the value of your profits and might lead you towards losses.

6. Discount Pricing: Your Customers Love It!

On average, 93% of customers use discounts and coupons throughout the year. – Statista

Discounts are undoubtedly the most preferred pricing approach by customers. There is no segment of the customers who aren’t mesmerized with discounts, rebates, coupons, and other similar offers.

Moreover, discount pricing also attracts huge traffic to WooCommerce stores, especially the price-conscious customers. Seasonal discounts also pave the way towards the clearance sale opportunities for the online store retailers to clear out the old stock inventory before welcoming the new season and fresh collection.

The only and most critical drawback of using this WooCommerce product price approach is that offering WooCommerce bulk discounts can give your customers an impression of you being a bargain retailer. Ultimately, making your customers request cheaper rates of the products than the actual value.

But, keeping the drawbacks aside, discount pricing, also referred to as a penetration pricing strategy is very helpful for startups and new businesses in building a strong customer base by offering products at convenient prices.

7. Competitive Pricing: Race for Better Deals

Competitive pricing strategy, as the name says, works towards analyzing the competitors’ pricing data, benchmarking the crucial milestones, and then carefully pricing your products.

This WooCommerce product price approach is product-driven. This means that you’ll see such pricing competition among the companies offering products that are very similar to each other in their roles and usage.

Planning product prices using this strategy will help you to negotiate the supply terms and cut your costs. But maintaining such a pricing approach throughout will be tough for small retailers especially.

8. Psychological Pricing: Know What Your Customers Want…

Have you ever noticed the price of almost every 5th product ends with an odd number – especially 9? Why is it done so? How can a single penny make a difference that a product is priced in the 9’s?

Well, to your surprise many studies have shown that product prices ending in 9 give an impression of slashed prices to the customers. This means that customers perceive it as every possible cent is already slashed off the price. For example, see the price of $5.99. As per human psychology, your brain will read it as $5 and not $6. Hence, $5 seems a better option than $6.

William Poundstone quotes, “The use of ‘charm prices’ (prices ending in odd numbers)can increase sales by 24% as compared to the nearby rounded points”.

There are much more research and studies that claim the importance of number 9 in psychological pricing. It’s a very elaborative concept to deal with here. However, you must make a note of it that psychological pricing basically deals with how to manipulate the thinking of the customers to motivate them to make a purchase. Therefore, you can also term the WooCommerce psychological pricing approach as customer-specific pricing for WooCommerce.

9. Price Skimming: Drive High-End Profits in Shorter Duration!

This WooCommerce product price strategy pertains to when an eCommerce business charges the highest price to customers initially and then lowers it over time. As demand from the first customers are satisfied and more competitors enter the market, the business lowers the price to attract a new, more price-conscious customer base.

The price skimming strategy basically helps you to take the advantage of the high profits when the competition is low. Apple is the best example from this category. Apple first segments its potential customers before launching its products. Because it is well aware of its prospective buyers, using this pricing model helps it cover all the hidden costs in developing a new product like iPhone, iWatch, etc.

The price skimming approach is especially useful if you’re looking out for some high-end profits in shorter durations. This pricing strategy is successful for any prestigious brand with a strong brand name and goodwill or in case of scarcity of the products.

10. Economic Pricing: Straightforward Approach for Price-Sensitive Buyers…

Be you new or old in the market, it doesn’t matter to your customers unless and until your pricing strategy is optimum for them. Not all potential shoppers are keen to spend more every time they move out to shop.

Hence, an economy pricing strategy for WooCommerce products is typically used for commodity goods like dairy, groceries, medicines, etc. The economy pricing approach is where the products are priced at their initial base price or minimum profit markup. The profit earned on such product prices is solely dependent on the quantities sold.

Setting up economy pricing is similar to setting up cost-plus pricing:

Production cost * profit margin = price

The economy pricing approach is straightforwardly executed, minimizes customer acquisition costs, boosts the buying capacity of the price-sensitive buyers. However, the low profit-margins demand upscale product quality to maintain the consistency of the sales volume.

Key Tips for B2B Sellers to Set Up WooCommerce Product Price

There are many more pricing strategies than mentioned above. However, you may choose any WooCommerce product price strategy that suits best for your store. But make sure that you choose wisely. One wrong decision can break your online business forever.

Thereby, take a considerate look over the 4 key tips that you must remember at your fingertips while planning a product pricing strategy. They are –

1. Compare the profit for each product individually to markup the difference in discounts and bulk purchases.
2. Calculate COGM (cost of goods manufactured). Manufacturing costs for each product include the costs of material, labor, payment, transportation, etc.
3. Running a B2B or wholesale store requires you to maintain a profit margin of at least 50%. For retailers, the profit margin can be calculated using the formula –
   Retail price-cost price/retail price = retail margin %
4. Differentiate your direct-to-customer price with the business-to-business price to avoid any confusion while closing a deal.

Your WooCommerce Product Price Is The Key To Improved Performance. Choose Wisely!

WooCommerce product price strategies are wide enough to be clubbed as per your business requirements. You can surely go with any single pricing strategy for your online store. But having a constant approach can give your customers a dull vibe. Therefore, it is recommended to switch between 2 pricing strategies occasionally to keep the interest of your customers active all the time.

Not sure of which pricing strategy to use? Don’t worry, connect with us to learn more about your hidden business opportunities and how you can take advantage of them by pricing your products right.