Defining Online Success with the Right Pricing Strategy

Online Shopping

Let’s face it. Low prices are the manna from shopping heaven for many online shoppers.By far, such a price obsession seem to come to life most on Cyber Monday – the online shopping blitz of the year. Good thing manufacturers have pricing security measures installed; with this, sellers cannot just nosedive prices to hit rock-bottom levels.

The Online Shopping Trend

The Internet has revolutionized businesses worldwide. Because of its capacity to connect everyone, a business which would have been otherwise limited to selling in its small corner of the world can now have their goods available for people thousands of miles away.

U.S. Census Bureau data shows online shopping increased by as much as 27.4 percent from 2011 to 2012. In contrast, brick-and-mortar stores grew only by 0.1 percent – a measly number compared to what online stores are experiencing.

But, the Internet is a two-edged sword that many online retailers may have come to realize by now. All the information overload has produced more highly-informed consumers bent on  comparing prices at the tap of a finger.

Making the Most of Online Sales

The ability of online consumers to easily compare prices could certainly put businesses at a disadvantage in the advent of events like Cyber Monday – a day expected to rake in billions of dollars every year.

Nonetheless, enforcing MAP pricing policy allows prices to settle. MAP, or minimum advertised price, is a pricing level agreed by manufacturers that sets the limit on how low a product can go online. With this, resellers are free to do their pricing as long as it doesn’t go lower than the agreed MAP.

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While this sets aside the needs of consumers, this only makes sense in the light of business. Only by setting the lowest possible selling price can brands maintain their strength and ensure that manufacturers can rake in profits.

With MAP, business thrives – free from the onslaught of uncalled-for rock-bottom prices.