As a small e-commerce entrepreneur, you will be competing with the likes of Amazon and other giants’ furniture retailers. But selling your furniture at a low price doesn’t mean that you will get more customers and increase your sales. All you need is to figure out the amount you need to make a living along with your values. Most entrepreneurs price their furniture based on a financial consideration which leads to overpricing while others price them to differentiate from competitors’ which may lead to underpricing. To avoid this, here are tips that you will use to price your furniture and stand out from competitors:
Determine your cost and desired margin
Every entrepreneur’s aim of selling online is to get a profit. Hence, the price of your furniture needs to be sufficient to recover the material, labor, rent and other overhead costs and earn a little profit. Once you have determined the average cost per furniture, you will see the revenue you need to cover all your expenses. With this, you will not underprice or overprice your furniture.
Know your audience
Considering your audience is essential in selling. Know what they want from your furniture. Look at the part that price plays for them to make a purchasing decision. With this, you will know if they are driven by the lowest price or by the value of the product. If they are looking for the lowest price, you can lower the cost but don’t undercharge as this will lead to losses in your business. You can try to convince the customers that the furniture is of high quality and this will make them purchase it with the price.
Consider your competitors
Being unique will make customers choose you over your competitors. Hence, before you set a price for your furniture, do a research and see how your competitors are charging. If their furniture looks exactly like yours, you can lower the price and still get a profit. But if it’s of high quality, you can price it higher and tell the customers how it will benefit them.
At times customers are willing to pay for any price you set for your furniture. With this, you will get an opportunity to charge whatever you want. If all you want is a huge profit, then you can place a higher price, but if you aim to provide quality furniture at an affordable price, you can charge less and still get a profit.
Pricing your products incorporates economics of your business and mindset of your customers. Hence, you need to do market research and get an idea of how competitors price their furniture.