Four Key Factors To Consider Before Launching Your Online BusinessOctober 21, 2020
Few things can generate as many doubts in an online business as determining the prices of products and services …
Few things can generate as many doubts in an online business as determining the prices of products and services. For one thing, you don’t want to charge less than what you offer is worth, but you shouldn’t set a price outside the market either. What factors are then essential when starting a digital business? That is precisely what we are going to talk about today.
One of the most important factors for your online pricing policy is the issue of the currencies in which customers will make payments for your products or services. For example, you should be aware of the change from USD to EUR and vice versa so as not to lose money in your payment gateways. And, being an online business, customers may want to use different currencies when paying for your product or service. You can choose to offer fixed prices in different currencies, or to set prices in a specific currency, and then let your payment gateway apply the conversion automatically.
We are facing one of the most important factors when designing your pricing policy. Before preparing it, you must calculate the costs involved in managing your business . These include all fixed costs (recurring expenses each month regardless of your billing) and direct costs (expenses you incur to provide your products and services).
Scrutinizing your competitors’ pricing policies can be very helpful. Analyzing your competition is always helpful . What prices are your competitors charging for products and services similar to the ones you are going to offer? What bonuses do you offer in your sales experience (free shipping, 24/7 customer service)? What type of customer are you attracting with your prices? What position do they have today in the online market? Answering these questions will provide you with an invaluable reference point on which to successfully work on your pricing policy.
The following questions about customers can be of great help to you. Are they governed by the lower price or the value they get? What role does price play in your purchasing decision? What socio-economic and demographic characteristics do your clients have? The answers to these questions will help you determine if your price is correct or not. For this, you must do a market analysis work before starting your online business adventure.
In short, before launching your digital business project, you would do well to spend some time analyzing what impact currencies, costs, competition and customers are going to have on your pricing policy. It is practically vital to the success of your business that you have clear answers to all these questions. More than one business with a good idea for a product or service has ended up failing for having ignored these fundamental and essential aspects. Don’t let the same thing happen to you!