Pricing my products

I just read something interesting about pricing your products. The article mentioned how Starbucks could command such a high price for their coffee and said "Well, do you want to sell a cup of "coffee", or do you want to sell an “experience”?

As I'm building my site, one of many hundreds that sell the very same thing, I know I am definitely offering a different experience than the others, that tend to offer more or less the same rather blah experience.

Having said that, I'm very late to the party and I don't know how to best price my products. If I look at the top 2 competitors, the price swings are radical. If I add more competitors to the mix, it just gets crazier. I don't know where to be amidst this group.

My wholesaler is actually one of the top competitors and they are far from the cheapest on their own ecommerce site. I can certainly price lower than them and make a nice profit, but I would still be far from the lowest. Then again, I offer a better experience.

This is very confusing!

The answer is actually quite simple:

Ask yourself "what margin do I need to survive?" and then set your pricing policy.

In eCommerce (and in the bricks & mortar business) there will always be others who are undercutting prices, that is just a fact of live.

Offer top Customer Service and, yes, an 'experience'. Sadly, it is Customer Service that is lacking these days in retail. If you get an enquiry, respond as quick as you can and in a helpful and friendly way - no matter how 'annoying' or 'dumb' the question may be.

Make your customers feel confident, make them feel welcome.

Rule 1: the customer is the King
Rule 2: if the customer is not the King then rule 1 automatically applies

frank18:

The answer is actually quite simple:

If you get an enquiry, respond as quick as you can and in a helpful and friendly way

If I see a statement on an ecommerce Contact Us page like, "We respond to all inquiries within 24 hours.", I look elsewhere. That interval suggests to me that you're running your site in your spare time (true of most Zenners, I guess), and strikes me as unprofessional.

I think it's a very good idea to figure out some way to gurantee a response in one hour, if not sooner.

stevesh:

If I see a statement on an ecommerce Contact Us page like, "We respond to all inquiries within 24 hours.", I look elsewhere. That interval suggests to me that you're running your site in your spare time (true of most Zenners, I guess), and strikes me as unprofessional.

I think it's a very good idea to figure out some way to gurantee a response in one hour, if not sooner.

I always thought the 24 hour reply was a decent interval. I've actually seen 48 hours listed! The Internet allows for people to shop in the middle of the night, so saying a response would come in one hour, if someone chose to send an inquiry at 2 AM, would not really be truthful unless you had a graveyard staff.

Most of the companies in my field have posted hours of operation as Mon-Fri 9 Am to 5 PM. Therefore, any email you send on Friday evening would not be responded to until Monday.

traytray:

I always thought the 24 hour reply was a decent interval. I've actually seen 48 hours listed! The Internet allows for people to shop in the middle of the night, so saying a response would come in one hour, if someone chose to send an inquiry at 2 AM, would not really be truthful unless you had a graveyard staff.

Most of the companies in my field have posted hours of operation as Mon-Fri 9 Am to 5 PM. Therefore, any email you send on Friday evening would not be responded to until Monday.

No need to state an actual time frame such as xx hrs, simply say "We respond to all inquiries as soon as possible" - or something similar. Even the seasoned online shopper understands that humans cannot sit in front of their PC or access their mobile emails 365/24/7 especially when merchant and customer are in different time zones (eg AUS - US)

I frequently get comments from customers such as "Thank you for replying so quickly..."

Cool, thank you for your input.

I didn't express myself very well in my last post (trying to watch the coverage of the George Zimmerman verdict at the same time), so let me try again.

It's true that my main pet peeve in life is being kept waiting, so not everyone will react as I do, but if I find a product I want to buy on both site A and site B and the other things I consider important (price, ease of site navigation and readability) are roughly equal and I send an inquiry to both sites, and site A provides a suitable reply in two hours, it won't matter what site B has to say in its reply in twenty-four hours because I will have already purchased the product from site A twenty-two hours ago.

I've seen a lot of talk here about the importance of customer service, but I wonder sometimes about the sincerity of those opinions.

Of course the Internet operates 24/7/365. That's a big part of the reason I buy so much stuff online. In most cases, the 'staff' of your Zencart store is, well, you. If you and I are in the same time zone, and I did you the courtesy of wanting to buy something from you at 2:00 AM, why would I want to wait seven hours for you to come into the office and reply to my question ? I can think of several ways to automate waking you up when a Contact Us message comes in.

I'll disagree that the 'seasoned online shopper' understands thae reason for a lengthy wait for a reply. He tolerates it because he has to. If 'most of the companies in your field' only work bankers' hours, providing more convenient service is a good way for you to stand out among your competitors.

There are a couple of restaurants in this area which allow customers to phone in orders and provide the store with the make and color of their cars. When the customer arrives, there is a restaurant employee in the parking lot with the order, ready to hand it to the customer. I've never used this service myself, but it tells me that those stores are scratching for every last bit of business. I admire that.

This whole question reminds me of a quote I once read from film director William Friedkin: "But the audience is right. They're always, always right. You hear directors complain that the advertising was lousy, the distribution is no good, the date was wrong to open the film. I don't believe that. The audience is never wrong. Never." This is a guy, I think, who understands the proper relationship between seller and buyer.

Just my $.02 worth, of course.

stevesh:

I've seen a lot of talk here about the importance of customer service, but I wonder sometimes about the sincerity of those opinions....

Agreed - however, I also work in a B&M retail environment and it is our utmost priority to serve the customer and walk the extra mile to make them happy.... and happy customers keep returning to the store. We are not the cheapest in town and even though there are discount stores with much cheaper prices, that comes at an expense: less qualified and poorly paid staff -->> less or no service.

Stevesh said:

Of course the Internet operates 24/7/365. That's a big part of the reason I buy so much stuff online. In most cases, the 'staff' of your Zencart store is, well, you. If you and I are in the same time zone, and I did you the courtesy of wanting to buy something from you at 2:00 AM, why would I want to wait seven hours for you to come into the office and reply to my question ? I can think of several ways to automate waking you up when a Contact Us message comes in.

Are you saying you want to be woken up each time you receive email?

traytray:

Are you saying you want to be woken up each time you receive email?

It would be one way to offer the 'excellent customer service' we're talking about here, yes. (Contact Us emails only.) Again, it's mostly about how you can stand out against your competition.

BTW, for the handful of products I checked on your site, your prices are lower than Amazon's. That's a good start.

stevesh:

It would be one way to offer the 'excellent customer service' we're talking about here, yes. (Contact Us emails only.) Again, it's mostly about how you can stand out against your competition.

BTW, for the handful of products I checked on your site, your prices are lower than Amazon's. That's a good start.

Interesting on the waking up. Excellent on the price check against Amazon. Funny, but I don't see Amazon or eBay as my competitors. I know they offer the same products, but people that tend to buy fragrances in those places, don't tend to frequent online ecommerce stores. I think they are more each others competition than my competition when it comes to what I sell.

As a rule, I cannot compete with eBay prices, nor can any of my competitors, yet they are all still in business doing fantastic business for many years. Based on this, I never even look at what eBay or Amazon prices, so I am very surprised that I might be offering better prices.

Having said that, the majority of purchases in online stores like mine come from women. If a man was shopping without any input from a woman about past customer service, he might just think to go to Amazon because it is a store he frequents. I have asked other men and they told me they just type in the name of the fragrance in Google, and once they get a price, they might do that again to see a competitors price and then choose the lowest price.