How to be more Effective with Pricing on Shopify
Last modified: June 28, 2021
When it comes to making sales on Shopify, the pricing of your product really does matter. One of the most common tactics that is used by brands is to reduce the number on the furthest right of the price by one. This is because it makes the price look significantly cheaper than it really is and therefore increases the conversions on a website.
There’s been extensive studies on this. In a recent study, a company tested $x pricing against $x-0.01 pricing (i.e. prices that ended in .99). The findings were that by lowering the price of the product by just one cent could increase the conversion of the product by up to 117%. This meant that orders were more than doubled.
Therefore, if you adopt this tactic, then you can see an increase in orders and profits to your store.
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How does this Work?
The interesting factor in this pricing strategy is how the strategy works. And that is how humans read a computer screen. Most of the time when someone is reading a website they’re doing so left to right. This means that the magnitude of importance is always given to the item on the left. So for $5, the number of 5 is important. But if you reduce that price by 1 cent, then it looks like $4.99 and the magnitude of importance is 4 which is much smaller to the brain.
This doesn’t always work. There are some who can get past this simple trick. But it is a good option.
Some people have suggested to get around the people noticing the pricing difference you can use a different number, .x7. This can be another good option, but there isn’t any evidence that this works any more effectively. However, it is a value that is routinely used on retail stores.
Other Ways to be More Effective with Pricing
There are also some other ways that you can be more effective with pricing. For instance, you can try decoy pricing. This is where you have three sizes of a product and you make the medium and large options to be closely priced so the customers choose the larger to feel like they’re getting a better deal.
Or you could try tiered pricing where you offer a discount if a customer orders more of a set product. This can be easily done with an app like Volume & Discounted Pricing.
Final Word: How to be more Effective with Pricing on Shopify
Being more effective with your pricing on Shopify is the best way that you can earn more profit. Above are some of the strategies you can use on your store.