Don’t Know What an eCommerce Pricing Engine is?

Our software as a service offers the ability to find your comprehensive competitive landscapes for each of your products, and the provides intelligence to make smart pricing decisions in seconds, not hours.

Watch this quick video.

Kudos to BlackLocus team members Hajin, Lukas and Matt for this wicked awesome video!

VIDEO TRANSCRIPT

BlackLocus is a powerful and affordable e-commerce competitive pricing engine for eTailers large and small. BlackLocus can scale from one product to millions of products and find unlimited competitors for each one. Best yet the actual data empowers you to put your best price forward.

Say I’m an online electronics retailer. This is my BlackLocus dashboard. Let’s start with the top competitors report. Here I can see my top competitors, their online popularity and the number of products we have in common. Better yet, I can see a snapshot of how our prices compare. I want to see more about this competitor. They have slightly more traffic than I do. Over forty percent product overlap and I’m pressed below them seventy nine percent of the time. I could be leaving money on the table. Let’s star this competitor as a favorite and create an alert.

I want to be alerted whenever my price falls below the lowest price of my starred competitors by five percent or more. So now that the alert rule has been created I’ll be notified by email whenever my prices fall below my starred competitors.

Now let’s click into this alert. This is a list of all the products that match my alert settings. Let’s drill down into this product.

This page shows me the comprehensive competitive landscape for this particular product. Looks like I’m sixty four dollars below my nearest competitor. Over here I can see historical pricing data. I’m the blue line. The price trends on this product are going back up.

It’s definitely time for me to increase my price. To do that I’ll export this data into a csv file. Now I can upload these price changes into my shopping cart, my marketplaces and other price comparison engines. Competitive pricing analysis is now quick, powerful, and affordable with BlackLocus. Schedule your demo today.

New Kid on the Block: 5 Tips for What to Do When a New Competitor Shows Its Ugly Mug

January 24, 2012

Pricing Strategy

Leave a Comment

Your e-commerce pricing strategy may be working quite nicely for you, until suddenly a brand-new competitor shows up, and suddenly a good number of your customers are flocking to that eTailer.

Your first reaction might be to restructure your own pricing strategy and undercut this new kid on the block, an impulsive move that could end up costing YOU rather than the new kid.

But before you jump off the deep end of the competitive landscape, unleash your inner Sherlock Holmes and sleuth out this new competitor. Learning everything you can about what the new kid is up to is referred to in e-commerce as “competitive intelligence,” and it could really pay off for you in the long run.

Navdeep Sodhi, the author of Six Sigma Pricing and its companion blog, cautions, “Intelligence gathering should be pragmatic rather than a wasteful collection of data” in this blog post. He then poses some thoughtful questions you can explore:

Is the competitor a wild card across the country, or can we spot consistent patterns?
Do they price aggressively everywhere or only in specific sales regions or for certain customers or products?
How does the competitive offering compare with our product features?
Is the competitor irrational [or] just reacting to our aggressive behavior?

Another handy tool for sussing out your competitor is this handy-dandy competitive pricing analysis checklist from FastTrac® GrowthVenture™. It walks you through figuring out where your new competitor fits in these three broad pricing strategies:

Lower pricing
Higher pricing
Parity pricing

Once you’ve pegged your competitor, it’s also a good idea to find where your own pricing strategy fits on the checklist.

As you’re doing your detective work, keep this tip in mind regarding e-Commerce competitive intelligence: in today’s real-time, data driven, automated-technology world, it’s an ever changing landscape. In order to appropriately respond to today’s price transparent market, you need a stream of fresh data and the ability to act quickly.

Here’s where BlackLocus.com can serve as your Watson. Oh, sure, you could noodle around yourself and collect a bunch of information by spending hours and hours of Googling, manually spot checking prices, reading corporate reports, etc. But why expend all of that valuable time when BlackLocus.com can give you the data on your competition?

Once you’ve completed your investigation, you will have enough data to make an informed decision on how –– or even if ––– you’ll respond. And remember, look out for your own best interests above all else, and before you know it, that new kid on the block will just be another irrelevant eTailer.

Case closed!

Request a demo of the BlackLocus Pricing Engine and get a free competitive price analysis and consultation to see how you can quickly and easily see and monitor your entire competitive landscape and make educated pricing strategy decisions.

10 Most Popular Pricing Strategies

January 4, 2012

Pricing Strategy

Leave a Comment

You have a product. You need to sell it. But for how much?

It’s one of the 4 Ps of Marketing: Product, Promotion, Place and Price. Within price setting, there are countless variables. A comprehensive understanding of your company’s objectives, costs and available pricing strategies will help you set competitive prices across your entire product suite.

Here are the 10 most popular pricing strategies.

1. No pricing strategy. Sadly, this is one of the most common pricing strategies. Many retailers just wing it.

2. Cost Plus or Absorption Pricing. The simplest of all pricing strategies. Add the cost of production to a percentage markup and you get your price. This is the easiest pricing strategy to use, and can be used in tandem with other pricing strategies.

3. Competition Based Pricing. Conducting a thorough pricing analysis on the entire competitive landscape of each product in the product line and making sure you are within reach of your competitors is difficult, time-consuming and often requires a dedicated research team. Unless you employ price management software to make that job simple and easy.

4. Freemium. It’s more than a business model; it’s also a pricing strategy. Offering a free product, and tacking on a set of ‘pay to upgrade’ features to that freebie and you have a Freemium Strategy.

5. Dynamic Pricing. Fancy, and used almost exclusively as an online pricing strategy, Dynamic Pricing takes into consideration multiple data points in setting a consumer’s individual price and sets the price automatically and dynamically online. Have you ever bought an airline ticket? The airline industry has had this pricing strategy nailed for years, considering factors such as flight demand, your purchase history, and the geographical location of your internet address.

6. Skimming. Is your product something people have been waiting anxiously for? You could consider setting your price sky high at product launch. This pricing strategy is named ‘skimming the market’ by seeking less sales with a higher profit. The price can‘t maintain forever, but could be a valuable revenue increasing strategy for hot new merchandise. This pricing strategy if often used on technology products. Think about how the price drops on technology products as time goes by.

7. Loss Leading (or High-Low) Pricing. Have you ever thought about losing money on a product? It might sound crazy, but it is a common revenue generating price strategy. The end goal is to draw customers in with a high demand product at the low price. Retailers will often encourage customers to buy more at checkout/point of sale, thus increasing the units per transaction and making up some lost margin. The loss leader product is generally set at an intentionally low price, or priced normally with an aggressive discount or sale. Grocery stores are masters of this pricing strategy.

8. Penetration Pricing. Is your product new to the market or new to your company? You might try another low ball price strategy called Penetration Pricing. By setting the price drastically lower than your competitors, you are likely to woo over customers quickly and gain a share of the marketplace. Just like skimming, that price can’t go on forever. Once you’ve reached a predetermined market share goal, you would likely switch pricing strategies to keep the momentum and generate more revenue. Proceed with caution though, as you risk alienating the customer base you have worked so hard to gain!

9. Psychological Pricing. Probably the 2nd most commonly used pricing strategy. Yesterday the product was listed for $10.00. Today it was dropped to $9.99. The difference? 1 cent. The gain? Likely a sale.

10. Premium Pricing. A a consumer, you’re standing in front of the shelves and you’re given the choice of Products A, B and C at prices all relatively the same. Then there is product D. Product D is priced a wee bit higher. Have you ever thought, “Well, this one MUST be better,” grabbing Product D off the shelf? The retailer could be employing a Premium Pricing Strategy where they’re hoping you equate the higher price with the idea that it is a better product.

Not all pricing strategies are viable choices for each company (or even each product). The first step in auditing your pricing is to gather your costs and complete a detailed competitive analysis on each product. These two pieces will help identify which pricing strategies to use successfully.

Request a demo of the BlackLocus Pricing Engine for eTailers to see how you can quickly and easily understand your comprehensive competitive landscape and make educated pricing strategy decisions.