Black Friday, do you love it, loathe it or just avoid it? Maybe you’re a little fed up with the hype, which seems to move up another notch every year. However you feel about the busiest shopping time of the year, it’s mainstream, it’s here again and it’s more important than ever for online sellers.
In the minds of millions of shoppers, Black Friday is associated with deep discounts. With Black Friday and Cyber Monday converging into a mega-deals weekend and the sales starting earlier each year, we now have an entire week where shoppers expect rock bottom prices. It’s unstoppable because everyone loves getting the best deals early to save time & money in the lead up to Christmas. Over the period, sales go through the roof but all too often for sellers, prices plummet to dangerously low levels.
The challenge for sellers is to properly price their merchandise to maximize sales. It’s one thing lowering prices to motivate buying, but sellers also have to protect their margins.
Here’s some useful tips to help you cope with the annual onslaught and keep your business on track as you head into the new year.
1. Be aggressive but be strategic
You may be tempted to price aggressively across your entire product range. You’re still not guaranteed to win the Buy Box and compete with rival sellers. Think about concentrating on markets where you can price higher and still compete. Don’t get pulled into the race to the bottom unless you can sell enough volume to justify it. Pick your fight carefully.
2. Monitor sales activity and adjust price
Traffic and sales are at a yearly high but online marketplaces are extremely competitive and volatile. The key to Black Friday pricing is to monitor your sales activity and keep adjusting your pricing strategy. There will be peaks and troughs of activity over the week, your prices must move accordingly. Keep an eye on the sales metrics that really matter for your business.
3. Targeted promotion and offers
Sellers can target their reductions to specific items where there is less competition. You can reduce your price for a limited time to take advantage of the increased traffic. Use the sales to move old inventory or offer larger discounts on lower value goods that sell quickly. Moving out the items you want to clear, by pricing them attractively, is a good option. Consider using time limited offers.
4. Keeping inventory for after Black Friday
Some sellers may prefer to save their inventory for customers who are ‘less’ committed to finding a bargain. Why sell your entire stock for a reduced profit when you can sell it after Black Friday at a better profit? There are plenty of opportunities to sell more in the lead up to Christmas. The boom can continue all the way into the new year with the January sales. Don’t sell just for the sake of it.
5. Use Repricing to protect your margins
For sellers who want to maximize sales over the week and protect their margins, repricing is a great option. Using a repricer, you can input your costs, lower your minimum price to be more aggressive, react to competitor changes and still increase your chances of winning the Buy Box.
With a repricing scheduler you move from one repricer to another as sales activity changes over the week. You can set up a unique repricer for different product categories. You can even set different pricing rules based on your remaining stock levels.
Periods of high shopping activity pose unique challenges for online sellers. To avail of all of the opportunities use repricing to build a reactive and flexible pricing strategy.
The pressure is on sellers to reduce their prices over Black Friday week, but that doesn’t always mean your margins should suffer.