Proven pricing methods for e-commerce Author: PriceCop Thursday March 22nd, 2018 • Category: Blog • Updated: Friday April 4th, 2025 No matter if you offer the best product in the world—if you don’t have a clear pricing strategy, you are destined to fail. This process plays a key role in defining a brand’s offering for its customers. So, pricing can be effective if you use one of the proven methods while keeping your goals in mind. Content List Premium Pricing Competitive Pricing Budget Pricing Penetration Pricing Psychological Pricing Promotional Pricing Price Skimming Premium Pricing Premium pricing means setting a higher price than your competitors for similar products. This strategy is used when there is something unique about your offering. It’s beneficial where customers are happy to pay more and there are no direct product equivalents. Competitive Pricing This means you set the product or service price at the same level as competitors. This pricing method is often used in highly competitive markets for the same or similar products. Because of an unstable market environment, retailers need to stay fully informed of competitor prices every day, on an ongoing basis. Daily monitoring is required. That’s why it’s practical for companies to use price-monitoring tools. Budget Pricing This strategy involves a low-cost approach to pricing. There are no special rules: simply keep your budget prices as long as possible and capture a certain niche more quickly. This method is suitable for large suppliers. Penetration Pricing This marketing strategy is used to attract customers to a new product or service. Penetration pricing means offering a low price on a new product or service during the initial launch. The goal is to draw customers to your offer. The main idea is that low prices can encourage customers to try your product and then want to purchase it again later. Psychological Pricing This is a pricing strategy based on the theory that certain numbers have a psychological impact. For example, using 99 instead of 100. At first glance, it might seem insignificant, but it can make a big difference over time. Promotional Pricing This promotion method relies on short-term price reductions of a product or service to attract more customers and increase sales volume. It’s more suitable for retailers. Examples include “buy one, get one free,” vouchers, and discounts. Price Skimming This method can be considered a form of price discrimination. After launching a new product, you set a very high price initially to maximize profit by selling to potential customers who are willing to pay. Then, the price is gradually reduced to maximize profit by selling the product to a broader customer base. Depending on your industry, PriceCop can help you get closer to your goals when applying any of the above strategies.