smart e-commerce pricing strategies

Ready to start selling products online? Before you launch, you must create a smart e-commerce pricing strategies that makes sense for your business. A good pricing strategy can dramatically affect your sales conversion rate and profitability.

But what precisely is a pricing strategy? It’s how you set the price of each product or service that you offer. It’s not enough to choose an arbitrary amount—you need to research, consider customer demand, and think about the cost of production. With the right strategy, you can maximize your profits while making a product attractive to your customers.

So what are some of the most effective e-commerce pricing strategies? In this article, we’ll cover six points that you should consider for your retail business as an e-commerce retailer: cost-linked pricing, introductory pricing, dynamic pricing, price perception management, competitive pricing, and bundle pricing. Let’s dive in!

What is a Pricing Strategy?

The strategic decision of pricing your product or service is one of the essential elements of your e-commerce business. A pricing strategy will help you determine the price to maximize your profits while remaining attractive to the consumer.

Pricing is crucial in any retail business, whether online or brick-and-mortar. By considering factors such as customer demand, cost of production, competitors’ pricing, the local economy, and marketing objectives, you can develop a competitive pricing strategy that will help boost sales conversions and profitability.

You must understand what a pricing strategy is and how it can be used to your advantage. Once you know how pricing strategies work, you can use them to create an effective pricing model for your e-commerce business.

6 Smart E-commerce Pricing Strategies

1. Cost-Linked Pricing

When it comes to pricing, cost-linked pricing is a great way to go. This competitive pricing strategy involves setting a base price for your item linked to its production or acquisition cost. This method helps you assess real costs and profits, allowing you to fairly account for overhead costs like labor, materials, shipping, and more. It also lets you factor in expenses related to customer service, such as offering discounts or returns.

For example, you might set your base price at the retail value of an item minus the cost of goods plus any profit margin. That formula will give you a strong starting point when pricing your items in a way that’s both realistic and attractive to customers.

2. Introductory Pricing

If you’re starting in the e-commerce world, you’re probably looking for smart pricing strategies that will help you attract customers and maintain profits.

Introductory pricing is one of the most attractive strategies for consumers. It involves offering a discounted price for a limited time to encourage customers to purchase.

There are ways to make this strategy work effectively:

  • Offer your product at a reduced price with added benefits, such as free shipping or discounts on accessories
  • Place an expiration date on your introductory prices to create a sense of urgency
  • Offer bonus packages that include items that complement your initial offering
  • Use targeted ads and email campaigns to spread awareness of your limited-time, discounted prices

3. Dynamic Pricing

Dynamic pricing is an approach that takes account of the market conditions and demand to maximize revenue. It’s a way to increase your profits without having to charge the same price all the time.

This process involves adjusting prices according to factors such as availability and demand. For example, you could increase prices on popular items during rush periods, like the holiday season or peak shopping days. On the other hand, if there is less demand for an item, you could lower its price to attract more buyers.

4. Price Perception Management

Price perception management is about ensuring that your customers perceive the value of your products or services correctly. This means using several tactics to ensure that viewers of your products or services see the product differently from how it is. For example, you might add bonus items or create bundles to make a product appear more attractive and valuable than it is.

Price perception management also involves properly marketing and labeling your products. Specific product features are highlighted through a well-crafted sale label, such as an extended warranty or a promotional offer as part of the purchase.

5. Competitive Pricing

Competitive pricing is when you base your prices on what the competition is doing. It can be a great way to ensure you remain competitive in the market—no one wants to pay more than they have to!

Comparing prices actively can help you ensure you’re not undercut while staying attractive to customers—so it’s a win-win situation. It may also help with price perception management: customers may feel they are getting a good deal on your product by keeping your prices relatively similar to competitors.

6. Bundle Pricing

Bundle pricing is an effective strategy that allows you to increase average order value and convert more customers. By bundling products together, you can give customers more value for their money and increase profits.

Let’s say you’re selling a laptop, and you offer it with a protective case for a discounted bundle price. This could increase your sales because it incentivizes customers to buy both items instead of just the laptop. Customers won’t have to think about purchasing the case separately, which is what would typically happen if they just bought the computer at a regular price.


With the right pricing strategy, e-commerce retailers can boost their profits and sales conversions. Utilizing cost-linked, introductory, dynamic, price perception management, competitive, and bundle pricing are all smart strategies that can be tailored to your business and its growth objectives. QL2 helps you with pricing intelligence platforms to stay on top of the latest strategies and trends to keep your e-commerce store ahead of the competition.