Demand-oriented pricing refers to a method of determining prices based on market demand conditions and differences in consumer perception of products. The same product can be priced differently because of its different styles and colors, and the market demand for the product is also different, so different prices can be set. Cross-border e-commerce sellers often set product prices based on the star rating of the product. When a product has been sold for a period of time, if the star rating is low and consumer feedback is poor, appropriate price cuts should be considered.
Demand-oriented pricing includes the following 3 methods:
1. Cognition-oriented pricing
Cognition-oriented pricing is a method of setting prices based on consumers’ subjective judgment of the value of the company’s products. For example: When the sun is shining, pedestrians have no need to buy umbrellas. If they buy umbrellas, it is also a rainy day. Therefore, the perceived value of umbrellas is relatively low in good weather. Despite this, sellers can still rely on promotional prices to achieve the goal of small profits but quick turnover. On rainy days, the price of umbrellas may rise a lot. A pedestrian who is in a hurry to go to an interview may be willing to pay more for an umbrella because they don’t want to go to the interview soaking wet. Therefore, sellers can make more profit from each umbrella sold.
2. Reverse pricing method
Reverse pricing method refers to the method of reversely calculating the wholesale price of the middleman and the production price of the manufacturer based on the final sales price acceptable to consumers, taking into account the cost and normal profit of the middleman.
3. Customary pricing method
The customary pricing method refers to the method of setting prices according to the customary prices formed in the market for a long time.
When launching new products, cross-border e-commerce sellers need to flexibly adjust pricing according to the consumption capacity and market prices of local consumers. The advantage is that they can obtain greater profits in some markets while ensuring pricing flexibility and product competitiveness; the disadvantage is that it is not easy for cross-border e-commerce sellers to obtain the specific situation of each country’s market. 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 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.