Setting Prices for Web Sales
Web Commerce Today, Issue 4, November 15, 1997
This article contains older information. Go here for newer information on ecommerce and selling online.
Merchants who expect to sell brand name products for full price on the Internet may find it difficult. The Web makes it easy for shoppers to search for the best price. Instead of charging full retail price, figure how much you save by doing business over the Web rather than in a physical storefront. Then pass some of that savings on to the customer. You'll not only build up a loyal customer base, but you'll still make money.Witness the battle between upstart Amazon.comand Barnes and Noble. Amazon was selling at a 10% discount initially, but when BarnesAndNoble.com began to sell at 20% to 30% off retail, Amazon immediately matched it. This is just a harbinger of pricing battles to come.
However, you may be able to sell at full price if you offer a unique product, or one perceived to be unique.
This fall I ordered a free Lands' End catalog from their website. They offer fine clothing. So do others. The distinction, however, is that they tell you how wonderful an item is, and entertain you in the process. In their Christmas catalog they personalize their Squall Parka by quoting Emily, who is a member of the Brandeis University crew team. "Your Squall Parka is wonderful!" she writes for their headline. "It even keeps me warm and dry rowing on the Charles at 5:30 am." Then the qualities of the MPX(r) barrier, 3-ply Supplex(r) nylon shell and Polartec(r) insulation are extolled in relation to Emily's early-morning rowing.
Lands' End added tremendous value to the product by the four paragraphs of text that took someone an hour to write and earned the writer perhaps $20. Reading it I want to buy the parka. They've made me feel its "amazing warmth for weight." They've convinced me that it'll "put a stop to chilly wind." And the $125 price on the Web (same as their print catalog) seems much more reasonable than if they'd said in terse prose: "Warm squall parka, $125 (classic navy, red, hunter, black, and cobalt)." These four paragraphs will help them sell a great many more squall parkas than a mindless phrase or two.
Adding value by good writing enables them to sell at full price on the Web, and you'll pay it. At least I will -- next time I plan to be on a crew team.
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