Retail Pricing models, strategies & rules for competitive pricing

Pricing models

How to develop a pricing strategy in order to price products of the online store.

Pricing models, such as cost-plus pricing, value-based pricing, fixed pricing and performance-based pricing, are commonly known in the eCommerce sphere as basic pricing models.

Different pricing models may be used in order to accomplish different business goals (e.g. profit, market share, etc.), and also may be selected to establish the basis for the perfect pricing strategy for your online store.

Pricing models, Optimal retail strategies, Develop a pricing strategy

The Cost-Plus Pricing model is based on adding a fixed dollar or percentage amount to the product’s costs. This model does not require deep market understanding and provides easy pricing. Yet, if the sales go not very well, the price needs to be decreased (and likewise, profit.) Therefore, this model should estimate the complexity of services and calculate all the included costs in order to protect a business’ revenue.

Value-Based Pricing is built upon price setting according to the perceived value by the individual customers. This means that a price meant for one customer may be different than the price offered to another.

The Rule-Based Pricing model is based on special predefined rules. It allows a retailer to connect its pricing strategy with business goals, by setting up predefined rules (scripts for price changes).

Rules for perfect pricing strategy

Perfect ecommerce pricing strategies contain two of the following basic rules about the price according to the shape of the demand curve.

1) The high price diverts shoppers attraction, especially if it’s a highly competitive industry, e.g. electronics & computers

2) The low price injures the online store margins and revenues.

The perfect pricing solutions and the best pricing practices uses the pricing based on the customers’ price perceptions.

Competera dynamic pricing benefits

What is product pricing strategy?

Every buyer intuitively determines an optimal price, which he or she is ready to pay for the certain product at the moment.

When pricing manager is searching for optimal pricing strategy he or she has to be ruled by the understanding of customers price perception, namely by their view of price optimality.

Optimal retail strategies

How to define the customers’ price optimality and build the optimal pricing strategy for the online store?

Here is a hard fact - 8 out of 10 customers compare prices in at least in two stores before making an online purchase. Efficient pricing managers always try to be ahead and for that very reason they track competitors pricing before the customers do it themselves

As long as 8 out of 10 customers are comparing prices in at least in two stores before purchasing any goods, the efficient pricing manager needs to be one step ahead of the shoppers. The must-have action is to track competitive data and to adjust prices accordingly before the customers will have any chance to compare them.

Retail leaders prefer to create a competitive pricing strategy because it offers an ability to win more of the customers’ attention.

Ecommerce price monitoring tools

The best way to monitor competitors’ pricing is to employ an automated price monitoring system that includes the price tracking tool and not only collects all the competitors’ price changes regularly, but also provides repricing recommendations.

Competera helps to analyze the competitor's price changes and provides access to the separate item price changelog at the competitors' shop.

By providing a competitive benchmarking solution, Competera compares the competition by the product categories, or the goods and highlights the items that need attention, and recommends actions that need to be taken.


  • Online fully automated competitor price tracking tool, which reduces manual work and possible human error
  • Collects and updates information as often as necessary, with flexible configurations which allow for custom time settings for different categories
  • Smart scraping technology that doesn’t trigger a website overload
  • 24/7 technical support and client assistance
  • Email notifications and reports
See how easy you can filter all your stocks by price alerts and competitors within Competera Products Report.

The process of developing and implementing a proper pricing strategy is easier and more efficient with Competera

because of benefits suggestions which are price monitoring on SKU level, timely data delivery (if one needs data at 9 am - Competera delivers it at 9 am), notifications on competitors price changings and price history analytics.