Price monitoring is also referred to as retail monitoring or price intelligence. It entails analyzing the price at which your competitors are selling their products and services. It is advisable to hire professional staff auditors to carry out the process for your business. The professional team should be well versed with the market trends and will provide results within a short time.
Remember, the sooner you get the pricing information, the sooner you will respond. Consequently, the sooner you will adjust your prices to beat your competitors.
How price monitoring works
To perform the price monitoring process, you have to come up with a feasible strategy. You will need to establish how you will start the process and run it through to the end. The right strategy will help you achieve the correct outcome and allow you to react accordingly.
Different companies can opt for different strategies depending on the nature of their business and how fast they need the results. However, no matter which direction you take, these steps are essential:
- Define your market
Your market is the determinant of your prices. You can only set prices that your prospective market is comfortable with. Remember, your competitors may have a clientele different from yours. They may therefore sell their products/services higher or lower than you depending on their clients’ financial might.
After establishing your market, set price ranges for your various products/services. Be keen on your clients’ financial capacities, since your business can only boom if your clients can afford your products/services.
- Identify your competitors
It is essential to identify your competition to set the prices for what you sell. Your competitors are those that sell products/services similar to yours. However, similar businesses in a far locality may not be your competitors since they may not reach your clients.
Therefore, focus on the businesses where your clients can access with ease and analyze their prices. Remember, your clients will shift to your competitors if they offer better prices.
- Check the competitors’ prices
Web scraping is a common method how companies gather public pricing information that helps to make a competitive pricing strategy. In order to start web scraping, you will need to find a reliable provider that offers powerful data gathering tools.
The main aim of price monitoring is to help you set prices that correspond to or beat your competitors. It would therefore help if you took time to establish the prices for their products/services. Only then can you set a price range that corresponds to theirs.
- Set your prices
After obtaining information about the current market prices for your products/services, set your price. Your price should not be too high or too low in comparison to your competitors. Also, remember to consider your clients’ financial abilities when setting your prices.
Additionally, consider the brands in your stock. Set the prices depending on the quality of your specific brands. Do not forget to account for buying price, shipping fee, and the money spent to bring the products to your store.
Be vigilant not to incur losses while trying to emulate your competitors. Remember, your competitors may have bought or shipped their products at a cheaper price and thus sell at a low price. Therefore, in as much you need to offer reasonable prices, strive to make a profit to sustain your business.
Why do you need price monitoring for your business?
Price monitoring is a process worth investing in, for your business to flourish. It has various benefits including:
- Building a Reputation
Price monitoring enables you to learn your competitors’ prices for various products and services. You can then use the information for the good of your business. You can set your prices lower than your competitors’. Clients will then choose to buy from you since everyone seeks an opportunity to save as much as they can.
Once you build your reputation as the cheapest vendor, your business will attract more clients. The reputation will also stick amongst your clients who may not realize when you hike your prices with time. However, consistency in prices will build your reputation further and draw more buyers to your business. Consequently, you will earn more.
- Increasing Profit
Price monitoring can also help you earn more profit from the sale of your products/services. You will establish when competition in the market is higher or lower. You can then increase the prices for your products/services when the competition is low and earn a higher profit.
- Establish competitive items
You can use price monitoring to establish which items are in high demand. Products/services on demand will be bought fast and in high volumes. They will thus earn you a lot of money even when the profit margins are low. Once you establish the high-demand items, you should invest in stocking them more. Consequently, you will have made enough profits by the time their demand lowers.
The ultimate goal of any business is to make profits. Nobody sets up a business with the aim of incurring losses. Therefore, it is wise to use all possible strategies to maximize your profit. Price monitoring is one such strategy. It will guide you in setting the best prices to make more sales, attract more customers and increase profits.