Of course, you love what you do, and this really helps you get through the long days and the hard work it takes to build your business. The same passion and enthusiasm can also distract you from the reality that you are in business to make a profit. Profit you can use to build a bigger, better business and create the impact that you want your business to have.

How you price your products or services is one of the most difficult and critical decisions you have to make. Too high and you’ll have no customers. Too low and you’ll have no profit. Your pricing strategy even influences how your brand is positioned in your customer’s eyes.

When it comes to competitive pricing, larger retailers have a definite advantage. They can set their prices low enough to win price wars with smaller retailers.

But what about you? Do you really want to have a price race to the bottom with your competition? What if you win?

The lowest price doesn’t always win. Lowering your prices is usually not the best way to compete, so let’s talk about developing a sustainable pricing strategy.


It has never been easier for customers to compare prices, so you need to think outside of the box here. You need to know the value you add to the purchase for your target market. For eCommerce stores, a value proposition could be fast delivery, excellent customer service, unique products, free shipping (for orders over a certain value), free product assembly, the list goes on…

Use the banner system in Arpastart eCommerce to show your customers the value you add and why they should buy from you.


Most pricing wars end with someone pricing their products too low. Even with thousands of customers and sales, you still don’t make enough profit. If you are lowering prices to the point of losing money, you should consider finding a cheaper manufacturer, a better supplier, look at your inventory management, or reducing shipping costs.

You will need to put a lot of analysis and thought into your pricing strategy. Business Victoria offers a handy guide to pricing for improved profit, which you can use for guidance.

Keep track of your product expenses and profitability with the Profit module available in Arpastart eCommerce Plus and Enterprise versions. Working out where your profit is has never been easier.


Once you know your margins and you price your products accordingly, you can offer incentives to motivate your customers to buy.

Offer limited time pricing to grab the attention of your customers. This works because you are creating a sense of urgency and limit the impact on your bottom line.
  • Purchase this product in the next hour and receive 40% off
  • First 10 customers that buy this product get a 50% discount

Make your deals look more appealing through the way you present the deals that you offer:

  • Buy 2 products and get 25% off
  • Buy 1 product and get 50% discount on the second product

Both deals give the customer 25% discount for buying 2 of the product, but customers might perceive the 50% discount in the second offer as a bigger discount.

By offering strategically planned incentives, you:

  1. Focus customer attention to your products
  2. Build your reputation as a trusted place with good deals
  3. Keep your bottom line safe


To offer a product range that will sell, you must understand your target market. Having a better idea of what your customers want gives you the opportunity to sell a wide range of products. Knowing the psychology behind your sales will assist you greatly in increasing your profit margin.

Use your Arpastart eCommerce store analytics module to work out what your customers are looking for, and expect to see on your site. It’s a great opportunity to find out where your product gaps are.

One of our favourite introductions to light-hearted behavioural economics is the Dan Ariely Ted Talk; “Are we in control of our decisions?” He gives many valuable insights into human decision making. One of the most relevant is showing us the benefit of giving customers multiple options, to help them figure out what they want. If you’re short on time, skip to 12:30 to get to the key parts.