Determining the right price for your products on Shopify is not an easy task. It’s important to find the right balance between a rate that maximizes your own profits, without being so costly as to put customers off. If a product is priced well beyond what your target demographic is willing to pay, then it naturally won’t sell well. As a consequence, your Shopify store may end up losing money, since no one will buy products.
This is why leading ecommerce businesses use price testing. Price testing can be done using specific apps or websites specifically designed for such tasks, such as Jika.
One effective method of price testing is A/B testing, which is when business owners upload a product on their ecommerce store with two different prices. Of your platform’s visitors, 50% will have access to the product at one price, while the remaining 50% can purchase it at the second rate.
This way, ecommerce brands can collect data and monitor revenue through performance data. This provides organizations with the opportunity to assess which price is best suited for the new product to maximize order values. A final price plan can then be set accordingly.
Using price testing to determine the right price plan for your products is very beneficial to your company, by potentially boosting sales and maximizing profits.
A/B testing is a specific method used by some websites or apps to help companies determine what the best price for their product is. The A/B method works by first putting your product up for ‘sale’ with two different prices, where half of your site visitors can avail the product for one of the two respective costs. One product price is shown to half the visitors and the other rate to the remaining fifty percent. You can then track how many sales are made at each price, and how quickly, and monitor other key metrics to determine which rate performs best.
The key benefit of the A/B testing process is that it provides you with real insight into how a product will sell at a particular price. The collected data eliminates the need for any speculation. For example, people assume that a lower price will result in more sales. However, the results may indicate otherwise - sometimes, a price that seems too low can make customers apprehensive about the product's quality!
One thing to note is that you should always be price testing. Ecommerce giants like Amazon, Walmart, and others are constantly testing their prices and we suggest you do the same.
Price testing not only lets business owners determine a good price for a product but the best one for sales. Sometimes, two different prices may both be promising options, which is why you need proper data and revenue insight to determine the superior rate.
Store owners generally determine which wholesale pricing to test out by referring to the rates of similar product variants or by monitoring the rates of competitor products. Social media platforms like Facebook and Instagram are great for learning about what your customers think of a product and its price.
How does Jika compare to other pricing apps which swap daily between prices? Price swapping between prices for 100% of your visitors is statistically invalid and will result in you picking the wrong price. Another downside of swapping daily between prices is that your customers will see different prices each day. With Jika, you can make statistically valid pricing decisions. As you collect more data on pricing over time, you’ll be able to optimize your tests so that you keep improving your pricing decisions.
Basic Shopify stores and wholesale apps should consider A/B testing product pricing over other testing methods because of the many benefits it offers your store, including:
By using a website like Jika for your Shopify store, you can improve revenue and improve your average order value. This helps your business grow; by determining a price plan that maximizes revenue and sales, your product is sure to succeed in a competitive market.
Keeping your Shopify store products priced reasonably also builds trust with your customers, and encourages them to check your other items and recommendations out from their mobile devices.
Using price tested rates for your products minimizes risk and ensures that your product sells in the market. Risk-control is crucial because once a product is launched, if it doesn’t sell well due to its pricing, then Shopify merchants have limited options for salvaging the situation.
Relaunching the product at a lower price may not encourage sales, because shoppers will have lost trust in your brand. Customers will also not appreciate seeing a product's price drop a few days after having made a transaction for it. Conversely, if a product’s low pricing takes your company into loss, then relaunching it at a higher rate may also be met by hostility from your customers.
Thus, price testing helps an online store make better pricing decisions beforehand, eliminating the need for potential damage control down the line.
Jika is an online website that uses price A/B testing to help companies determine a product's worth. The company was founded by a growth engineer who has experience A/B testing at leading organizations such as Pinterest, Hulu, and Wieden+Kennedy.
Jika is a very simple Shopify App with a three-step process:
As the test progresses, Jika filters all the information about the monthly revenue and displays it in a structured, organized manner, so it is easy to make comparisons.
Jika is a reliable, easy-to-use platform that gives you information on how to price your products so you receive maximum profits from it. Jika not only provides store owners with the option to determine better prices but also lets you test how a bulk discount will perform. A product's best price is always changing, and with Jika, your company can continually run tests and stay closes to optimal pricing.