- First off, its key for small businesses to understand that they are “price takers“, not “price makers”. At the end of the day, the consumers are the final decision makers with regards whether or not a product is worth purchasing at any given price. Businesses must make educated decisions based on anticipated consumer demand and therefore, the consumers are actually the ones set the product prices.
- Make sure you know your competition. If other companies are offering similar products, it’s crucial to have information with regards to their pricing decisions. A good way to begin is to take a look at your competitions pricing by doing a quick search on “Google Shopping” for the products your company offers. If you want customers to buy your products (especially online) you must make sure your pricing is in line, if not better, than your competitions.
- Don’t make rash price reduction decisions. If you decide to lower your product prices without understanding the possible repercussions, you may be faced with profit losses, and even a customer revolt when you elect to raise them again in the future. Therefore, when making price cuts (especially substantial ones), it can be helpful to label products at “promotional pricing”. That way you can get a feel for consumer demand without being fearful of upsetting your buyer base if you decide there is a need to raise the price again.
- Consider testing a dynamic pricing model. This last point is a bit specific to Pricefalls, but relates directly point one (that consumers really the set prices). Many of the listings on Pricefalls are Dutch or (Descending Price) auctions. In this type of setting, product prices fall over a period of time until they reach a level that a customer is willing to pay. Utilizing this type of model allows businesses to look at the price decisions made shoppers in order to come to an appropriate “fixed” price.
It’s clear that these four points are not the end all to pricing inventory. Dependent upon the industry and the size of the business their are a number of other strategies that a company can utilize to efficiently price their products. However, through some well seasoned advice, along with a bit of trial and error, the strategies above have certainly helped Pricefalls. If you have any other perspective on how to set prices for inventory please leave your thoughts in the comment section below.
The development of the retail market is shifting rapidly away from brick-and-mortar storefronts and toward e-Commerce venues. In an effort to remain competitive, many small business owners realize the need for an online sales outlet, but struggle to overcome the barrier of entry into the online space. A tremendous shift in shopping behavior is imminent as consumers are becoming accustomed to the conveniences of online shopping; it is apparent that traditional brick and mortar sales will continue to fall while online sales rise.
In 1999 online retail sales totaled to $15 billion or .5% of total retail sales ($2.7 trillion). By 2007, online sales increased to amount to $126 billion or 3.2% of the total retail sales market ($3.9 trillion), where physical retail sales totaled to $3.77 trillion. In 2009, driven by frugal consumer behavior in a down economy, brick and mortar sales fell to $3.55 trillion while e-Commerce sales rose to $134 billion, representing 3.7% of total retail sales and an 15% increase as compared to 2007. By Q4 2009, total e-Commerce sales were up 14.6% from the same quarter a year earlier. Future econometric projections include reports that e-Commerce sales will represent 8% of total retail sales by 2014.
There is and will continue to be a strong upward trend in online sales, especially as more e-commerce related businesses work to develop ways for consumers to purchase products online and to have them delivered to there door the same day. With the above statistics in mind, a sustainable business trend to watch in 2011 will be the increased incorporation of Internet based techniques in order to stimulate business. That being said, not all business owners have the information they need to jump online and experience the benefits to their primarily physical business.
There are various cost effective techniques that allow all types of businesses to capitalize on this trend and benefit from utilizing the Internet. Below I discuss a number of these web-based methods that physical and online retailers, as well as service providers can utilize in order to maximize productivity and the return on investment from using the internet for their public relations, pales, and business branding purposes.
To begin, here are a few affordable ways people can utilize the Internet to drive retail sales. Whether you want to drive attention to your online storefront or your physical business, these techniques can effectively and affordably provide businesses with the ability to get their voice heard and their products in the eyes of online shoppers.
Develop a Company Website
Small businesses can set up a private website in order to sell their products online. While this is certainly an effective technique, it takes time and technical knowledge to drive traffic to a small website. Furthermore, the customer development of an e-commerce site can be costly, especially if you online intend use it as a small segment of your business. However, there are a number of affordable software providers that can help businesses set up a company website for a relatively low cost. Here are some examples:
Get your products on Internet marketplaces and Comparison Shopping Networks
There are a number of Internet marketplaces and comparison shopping sites that allow businesses to promote products and set up stores. These sites are an effective way of getting products in the eyes on lot’s of consumers.
There are many sites out there, and some are better than others. It is important to choose a site that will assist you in making sure your listings are up to the marketplace properly and that everything is running efficiently. Sites like eBay and Amazon are marketplaces that allow businesses to list and sell products, and drive a considerable amount of traffic. However, it is really up to the small business to manage their virtual storefront, keep the inventory current, and to run the overall operation efficiently. There are some other online marketplaces and comparison shopping networks that provide a more enticing value proposition and either take a more one on one approach and help businesses throughout the entire process, or provide a more affordable alternative to the larger marketplaces. Here are a few:
(Sites that allow consumers to buy your products on the platform):
Comparison Shopping Sites
(Sites that drive consumers to your website to buy products):
Furthermore, there are a number of additional creative online techniques that can help generate brand awareness and to stimulate a buzz about for small and medium sized businesses. For instance, if run properly, an online sweepstakes can be a great way to generate lot’s of publicity at low cost.
I have had success running Youtube campaigns on the new Xbox 360 slim and my company utilized a well known technology reviewer (John4Lakers) in order to promote the giveaway, as well as Pricefalls.
Here is a link to the video:
As you will see, the video has received 82,000+ views. So, in exchange for an Xbox (~$250), we were able to get our company name in front of tens of thousands of people – many of which proceeded to register to the site.
If you are a start-up or don’t already have a large following, it can be helpful to promote your giveaway on various sites such as YouTube, Twitter and Facebook. In addition, here are some web-based distribution sites that allow businesses to post promotions and in turn let consumers know about the active sweepstakes and giveaways:
The internet is a tremendous resource that is becoming increasingly necessary for small and medium sized businesses to tap in to.
 United States Department of Commerce E-Statistics Report. (Published 07 March 2001)
 U.S. Census Bureau, ”E-Stats, 2007 E-commerce Multi-sector Report” (published 28 May 2009); .
 U.S. Census Bureau, “Quarterly Retail E-commerce Sales” (published February 16, 2010); .
 “Forrester Research 5-year forecast” (published March 08, 2010); .
The most interesting mistake that my company has made was our early decision to contract a P.R. agency for our public relations and marketing needs. Although the utilization of P.R. firms may work well for large corporations, it was not the best approach for a young start-up. Not only was the consulting extremely costly, the return on investment was minimal.
It became very clear, very quickly, that contracting out our marketing and public relations was not the most efficient avenue of stimulating brand awareness and it was critical for us to find a new method.
We decided to cut the P.R. firm we were working with and have since transitioned to an in-house marketing approach. Not only have we managed to save a ton of money, we have seen returns well over and above what was produced by the agency we were previously working with.
With the growth of the Internet and social media, it has become increasingly easier to contact both new and existing users, as well as media personnel, on a one-on-one basis.
Rather than paying a company to do our outreach for us, we decided to utilize the numerous free resources on the web in order to communicate directly with the people we want to reach out to. We have found this to be a much more effective technique for establishing the Pricefalls.com brand and attaining press coverage.
Other experts have also elaborated on effective ways for small businesses to generate a buzz about there business. For instance, in his book “The New Rules of Marketing and P.R.”, David Meerman Scott touches on the need for small businesses to “reach buyers directly”. This book is a great resource for small businesses looking to take their P.R. and marketing in house and viral.
It is crucial for a small business to have their voice heard. Here are two techniques that small companies can do in-house in order to generate more brand awareness and to market the business.
Technique 1 – Tell your story yourself
Rather then having a large P.R. firm generate and distribute your press releases for you, just write the press releases up yourself and distribute them on the various Internet based press release distribution networks. Here are a couple links to distribution channels that are pretty effective and at low cost:
(For a full breakdown of these services and some recommendations, see http://blog.journalistics.com/2009/what-press-release-distribution-service-should-you-use/)
These networks distribute your release across the web, and in many cases into the eyes of reporters who are will to cover the story. Furthermore, this method of distribution allows you to get your story in front of potential customers with a minimal (sometimes zero) cash investment.
Technique 2 – Let the Press come to you
Let’s face it, a reporters job is to investigate. It is crucial for the media to have stories to report on and they are always looking for something new to cover. However, rather then distributing the information you think the media wants to hear, it is much easier to attain coverage if you know what they’re looking for so you can craft your release around it. This is a great way to stimulate stories and it’s 100% free.
There are a number of resources that small businesses can utilize in order to gain insights into what types of stories the writers are looking to cover. One such resource is HARO (Help A Reporter Out). HARO is an email-based application that sends out inquiries from various reporters requesting information from individuals that they can use in their stories. Here’s a link to the site:
Those are just a couple of methods that can help small businesses owners get off the ground while trying to take their P.R. and marketing in-house. As mentioned earlier my company has been rather successful at using in house techniques to generate great press coverage. Below, I have provided links to recent press stories that our in house staff has been able to attain. We are always looking to connect with people in the industry and I am always open to talk further with other small business owners.