How do you continuously refine your pricing strategy?
- For e.g. how do you know what is the optimal pricing to charge to your customers?
- how do you test a new price and for how long?
- How often do you track your competitors’ pricing?
- Should I be aiming for a 20% net profit?
FYI I am selling a repeat-purchase product in the sports sector.
Hi @anothen ,
Happy to answer your question! Let’s go through them one by one:
- How do you continuously refine your pricing strategy? You should think of pricing as an ongoing experiment. Keep an eye on how customers are responding, how your costs are changing, and what impact each price tweak has on your net profit and margins. This is also super related to TrueProfit as we can show you your net profit & margins in real time, so you’ll know right away if a price change is actually making you more money or not.
- How do you test a new price and for how long? Try changing just one thing at a time—like the price—and give it 2 to 4 weeks depending on your traffic. If you’re thinking of raising your price, try not to jump more than 30% at once. And to make it feel like a win for the customer, it helps to add a bit of extra value, like a small bonus, upgraded packaging, or faster shipping. That way, the higher price feels justified.
- How often do you track competitors’ pricing? It kinda depends on what’s going on in your market. If things are changing a lot (like new tariffs messing with costs), you’ll want to keep a closer eye.
- Should I be aiming for a 20% net profit? Yes, 20% net profit is a solid target and a great place to be if you’re looking to scale. But when you’re setting your prices, it’s smart to aim for at least 30% net profit per order. Why? Because there are always extra costs that creep in (like returns, discount codes, or unexpected ad spikes). Shooting for 30% gives you enough cushion so that even after all that, you’re still landing around that healthy 20% overall.
Hope my answers are satisfying, and feel free to reach out if you have any other questions! ^^