Why it’s time to be transparent and show your prices online

Sara Drawwater
Seller Success School
9 September 2020
This article covers how buyers benefit from price transparency. We look at why businesses should overcome their fears of public pricing. Do you want more people to buy from you online? If so, it's time to adapt and give the modern consumer the information they need to buy online.

Lately we’ve had a lot of conversations with our clients about pricing. When selling online, the price of goods and services becomes front and center of the conversation.

How the customer benefits from price transparency

The benefits of price transparency to your customers are clear.

They can easily research the cost of goods and plan their purchases.

Buyers can compare suppliers and make choices based on what is important to them. They might choose to buy from a particular supplier for convenience, brand loyalty or because they want to buy small and local.

If the products are available to buy online the price may well be cheaper because of reduced costs! The costs of running a brick and mortar business are higher than selling online which requires less store frontage (less rent) and less staff (less salaries).

Finally, customers can buy any time and from anywhere without the hassle of having to physically visit a you.

This is an exciting prospect for when we make international payments available. Imagine when Zambians in the diaspora can view your online shop, buy online and have goods delivered to their family in Zambia, or even buy for themselves and have the products they know and love shipped to wherever they may be.

Imagine when international customers can buy unique products, hand crafted products, organic products, the type of products many more international shoppers are seeking these days.

These consumer benefits will be enough to convince customer-centric businesses to be price transparent. But some businesses have reservations about being so public with pricing.

Fears about public pricing of products

There are four main fears about going public with product prices.

1. Competitors will see my prices

There is a real fear that competitors will see your prices and simply undercut you to get the business. While it is possible that some competitors will do this, it does mean that their long term success is at risk because lower prices doesn’t always mean more sales and they're focusing on creaming off others rather than on adding value - not a good recipe for success.

Competitor based pricing only works when you set the price higher or lower than your competitors depending on how well your own product compares to the competition.

  • Is the product a like-for-like match?
  • What are the costs of bringing your product to market compared to the competition?
  • What is the quality of your product compared to the competition?
  • What is your competitive advantage?

Business owners who are hell-bent on being the cheapest in the market are probably not asking themselves these important questions and they are probably not valuing themselves effectively.

So rather than worry about what your competitors think of your prices, here are three things you can do to feel confident about being loud and proud about your prices.

  • Keep an eye on your competitors but don’t be consumed by them
  • Focus on communicating why your products are unique and what you bring to the market
  • Build your personal brand because people tend to buy from people they like and trust. Your competitors can’t be you!

2. The exchange rate is so volatile I have to change prices all the time

Some clients who are considering selling online are concerned about keeping up with price changes and will opt not to show prices in order to err on the side of caution. In the current climate this is a fair concern.

However, buyers are also used to this volatile market. It’s no longer surprising to see a product for a certain price only to see it has changed the very next day. In fact, this price volatility, with a more than likely price increase, means people are probably going to want to buy what they want and need with more urgency. And what better way to help them do this than to show prices online so they can buy anytime, anywhere?

Furthermore, we are developing two features that will help ease this burden.

1. We’re launching a Seller login system that will enable Sellers to manage their inventory independently. So, if you want the advantage of presenting yourself as an innovative brand that sells online then you can simply change prices online as you change them in store - except there is no printing, handwriting or product labelling required ;-)

2. We’ll be rolling out a feature that automatically changes your Kwacha prices based on the US$ rate. You simply give us your US$ prices and our website will automatically show the latest Kwacha equivalent.

3. My products are priced differently in different places

If your products are sold by multiple distributors and in different retail shops then this will be the case. Different distributors and retail outlets may well have different costs to contend with and apply different margins. But if you want to sell your products through as many routes to market as possible, then seeing your products at different prices is something you will need to accept.

It’s important to remember why buyers of your products buy from where they do.

Some buyers just want the cheapest product, no matter the cost. They will drive 30 minutes for a few Kwacha cheaper, forgetting that they are spending more on fuel.

Some people will knowingly pay more for the convenience, because the product is available in the store near their home or because it’s available online for delivery.

Some people want to buy from a particular seller because they like them, or because they get rewards for buying there, or because they want to support their ethical standards or because it’s cool to be associated with the brand.

There are many different reasons why people buy from where they choose to, so there is no strong reason to be concerned about your products varying in price.

4. I have retail and wholesale prices

Some of our clients are concerned about showing retail versus wholesale prices. Our platform has the ability to show both prices. And since everyone knows that there are retail and wholesale prices depending on the quantity you buy, showing both prices just means people can see the whole picture.

Some individuals will most definitely not want your products in bulk. Some people who like to bulk buy for a cheaper price may appreciate the option to buy small packs of your products. Then there will be resellers or manufacturers who are very likely to buy in bulk.

With a platform that caters for both retail and wholesale prices, showing both prices helps individual or business buyers make the right buying decision with more ease.

Fears about public pricing of services

Services are even more challenging to price than products. The cost of delivering a service may be completely different from one client to the next because of variations in the clients’ needs.

Having been service providers for many years, we believe that it’s advantageous to standardise services and package them up into fixed prices if possible. This is already done well in the travel and leisure industry where the customer gets food and accommodation for a set number of nights, a set number of activities and specific transfers.

Set pricing is more difficult to do in industries where the job specifications may change as the project gets underway. This is true with design and construction projects, for example.

It is possible to package up services by being clear about what is part of the package and what is not. And if you want to be able to sell your services online then you need to move towards standardised fixed pricing, so people can fill their virtual baskets with your services.

Summary

One thing is for sure, you can’t gain the benefits of selling online and scale your business without showing prices. If you want people to put your products in a virtual shopping basket and pay for your goods while you are sleeping then you’ve got to get over the fear of showing prices.

Price transparency is so much more customer centric and the modern day consumer certainly values access to information and efficient ways of shopping.

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