(i) Pricing based on cost
Cost pricing is mainly to make profits by calculating costs. The advantage of this pricing method is simplicity. For example: the cost price of a product is 5 yuan. The seller calculates the profit based on the product cost, transportation cost, platform cost, storage cost, etc., and then sells it at the price of cost plus profit.
(ii) Pricing with reference to competitors
Find a more competitive competitor of the same type of product and follow the price to avoid letting the other party seize market share and improve your own competitiveness. However, due to the unequal cost information of both parties, it is impossible to determine the other party’s cost. If the other party lowers the price and we also lower the price, it is very likely that the other party is still making money or at least guaranteeing profits while we are losing money. Over time, the seller cannot bear the loss, so this pricing behavior is not suitable for a long time.
(iii) Pricing based on regional consumption power
The market pricing method requires cross-border e-commerce sellers to adjust prices according to the consumption power and market prices of local consumers when launching new products. The advantage of this pricing method is that it can obtain greater profit margins in some markets while ensuring price flexibility and product competitiveness; the disadvantage is that it is not easy for cross-border e-commerce sellers to obtain the specific market conditions of each country, and they need to use some data tools or spend money and time on field investigations. In fact, cross-border e-commerce sellers do not need to know the data of all countries, because the e-commerce model of some countries is already very mature, and the information is relatively open and transparent. Some countries and regions that have newly introduced cross-border e-commerce models (Southeast Asia, Africa, the Middle East, etc.) can directly use the market research data provided free of charge by the TOSPINO cross-border e-commerce platform to reduce initial operating costs.
(IV) Pricing according to market conditions
If cross-border e-commerce sellers cannot accurately understand the market price, they can log in to the existing platforms of the market, and calculate the proportion of consumer groups at different price points among the consumers who have purchased according to the relevant keywords of the product, and then formulate the price range according to the distribution of consumer groups.