Adapt your price strategy according to stock type

Adapt your price strategy according to stock type

08/09/2021 - Pricing strategy

The stock volume is a factor that directly intervenes in the definition of your pricing strategy.  An outdated stock prevision can create a great hole in your checks, whether by not being able to cover the demand of your users or by having to maintain a high inventory cost that you don’t give out.  Because of this, it is essential to have excellent stock management of your e-commerce and adapt your pricing strategy to be able to bring your more than joy. Want to know how?

Which is the best pricing strategy according to your stock type

Before the possible stock types that you can have in your warehouse, there exists distinct pricing options that you can put into practice. Normally, these give a solution to different problems that can come occasionally both from stock excess and from a clear lack of units. 

We see how we can act in one occasion and in another occasion to optimize the sales of your e-commerce.

If you have stock excess in your e-commerce…

The stockpile in your warehouse can give rise to maintenance cost overruns or, worse, a need to dispose of merchandise due to questions about the expiration.  What solutions can you put into place to release the stock that you have accumulated obtaining the maximum profit? 

  1. Volume promotions. Offer a discount to the user for purchasing a larger product pack. This will make the value of the average ticket increase relatively, but, above all, you will obtain a fast stock release. 
  2. BOGO actions. Implement what is known as a 2x1 to, directly, duplicate units leaving your warehouse for every purchase. 
  3. Break the market prices. Set the prices even lower than your competition’s. You may not reach the profit margin you wished for, but at least you will save the maintenance expense  for having the product stored. 
  4. Make packs of related products. Include the product in question in a pack with other products of the same category or complementary. It will sell itself! 
  5. Propose a better alternative. Highlight it as an option to keep in mind in the key sites of your e-commerce, as well as together with KVI products that generate a lot of interest in your store. 

If you have less stock than expected… 

If you have not calculated the necessary stock well to cover the sales of your e-commerce, it may be producing a stock out in your warehouse.  And if you are already in this situation (be it whatever reason it is), you should hit the brakes, especially because it gives a bad image to your users. Let’s get on with it! 

  1. Increase the product price. This is the most obvious option, but you should do it cautiously so as not to create a bad reputation in regard to prices and loss of future purchases. Analyze competition prices and establish prices a small percent higher. 
  2. Promote similar products. Approve the circumstances for the release of similar products that you have in stock. If, furthermore, these have a more competitive price, you will be assured a greater percentage of sales. You will be taking advantage of getting ahead of the curve!  

Selling unavailable stock. This is not the ideal option, but at least it will allow you to gain margin with your users. The key is guaranteeing a longer delivery time. On the contrary, you can always offer the expenses and shipping for free; so you will not lose the sales, but you will not risk the compromise with your users.

How to always have an optimal stock in your e-commerce

How to always have an optimal stock in your e-commerce. 

One of the objectives of e-commerce stock management is finding the optimal stock, one that covers the minimum without surpassing the merchandise, but that allows you to maintain product sales fluidly where the released units recover on the part of your providers.  

The calculation of this stock depends, in essence, of the seasonality of your catalog and the promoted actions with those that you want to show during your campaign. For this, it is essential that you have, for example, stock security that allows you to cover anything unforeseen. 

An easy way to maintain this optimal stock is to have a  proper catalog management tool, like the Reactev Demand Forecasting solution. Furthermore, in today’s day and age, price optimization software pointers like Reactev also allow you to establish stock alerts when the purchase tendency becomes threatened by the inventory of your warehouse.

Without a doubt, a pricing and stock solution is your best ally to analyze the demand curves, predict the seasonal peaks, and make sure that your warehouse attends to the sales needs of your business with a good rhythm. What are you waiting for to try this before your next campaign?

Request a demo.

Category: Pricing strategy

Tags: pricing

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Maria Jose Guerrero
Content Manager

The first dynamic pricing solution designed by and for retailers