How should you price online? 

Distribution executives aren’t sure. Should you drop your price to blunt competition from the E-Comm giants…giving away profits you badly need?

Or keep your internet price high and invite competition? You can walk this fine line and increase your margin! The key is you need to understand how the major internet sellers make pricing decisions.

E-Comm giants do have a pricing strategy, but it’s not much of a secret.

We’re often asked if we scrape pricing data or know someone who will. These distributors hope for a simple solution to counter online competition. This is just my opinion, but scraping is a fool’s errand. You sell tens of thousands of items. It’s not simple to interpret scraping results given subtle UOM and other product subtleties. And then, what would do you do with the pricing data? How do you change your pricing and based on what strategy?

Our Internet Pricing Study

We studied 25,000 items sold by distributors in 5 wholesale segments. Our goal wasn’t to identify exactly where to price each item.

Our goal was to understand how the E-Comm giants’ price and why. We compared our client’s best price, average price and internet price vs. the giants. Items compared included “A” commodity items all the way down to the most incidental of items.

We compared our clients pricing vs. published internet pricing relative to items annual sales, # of customers buying, hits and ten other factors.

Here are the conclusions of our internet pricing study…

  • There are 5 factors that largely determine how the giant’s price
  • Distributor online pricing is very competitive on key items
  • Our clients lose price impression by overpricing the most incidental items
  • Money is left on the table on items in the middle

E-Comm giants understand item price sensitivity. They’re experts at analyzing item price sensitivity and setting price accordingly. That’s their secret…

Use the E-Comm Giants Strategy

Leverage a key asset you own…your data. Make data-driven price decisions. Know where to be competitive and where you can safely make more. Strike the right balance between price and profit.

Most Importantly, Use Your Data to Improve How You Price All Sales

Get full details of our internet price comparison. See how other distributors are beating the E-Comm giants at their own game and improving how they price all sales. Find out how our clients increase company margin an average of +1.7 points in the first year.

Contact Us for an Executive Briefing

Published On: September 23rd, 2020 / Categories: Articles, Featured, Industry Leadership /