As an online retailer, you’re well aware that your competitors are selling the same products, and the only difference you have is the price. The challenge for you is how to keep prices low without sacrificing your profit. One way to achieve this goal is through price monitoring. Here’s how you can use it to your advantage.
The lowest price possible
U.S. manufacturers currently have Minimum Advertised Price (MAP) policy enforcement on all resellers and retailers. It is the lowest price that a retailer can advertise for a product. This policy is not mandatory but disregarding it could get you in trouble with the manufacturers, so you better make sure that your price is within the range allowed by your supplier.
Track your competitors’ prices
You can keep track of your competitors’ prices manually or automatically. If you’re running an online store, it’s more efficient to use software to do the tracking.
Focus on your best-selling items
Even with a price tracking software system, it’s difficult to monitor every item in your inventory. What you should do is prioritize your best-selling items. Experts advise focusing on your top 5% items.
Select which competitors to monitor
You have to select which of your competitors to watch. The selection may require comparison with a brand or marketplace ranking. Once you have selected the competitors, find their products that match your stocks. If you have a price tracking software, you can import their product list in a database.
Watch out for price updates
Once you have all the competitors’ prices in your database, the software can begin monitoring. Aside from the price, you also need to check if the item is available. There’s no use tracking the price of an unavailable item.
Set up price alert changes
To benefit from the price tracking software, you need to know if there are any changes in your competitors’ prices. Your sales team could also receive the alerts via email. Once you’re notified, you could set up a counter-move. This may involve lowering your prices or offering discounts.
Some software systems even allow you to analyze your competitor’s pricing strategy based on their historical pricing trends. Once you discover their pricing method, it will be easy to anticipate their actions.
Competition among online retailers has boiled down to prices. The one who can give the lowest price or the highest discount will win over the customers. To make sure you’re that retailer, you need to monitor your rivals’ prices closely.