Ecommerce Pricing: How to Stay Ahead of Your Competitors and Boost Your Revenues

Since the beginning of retailing, prices have played an important role in getting sales and retailers have always been keeping an eye on the competitors’ prices –and for good reason.

According to a PWC report:

  • 61% of consumers visit e-retailers to compare prices
  • 57% to look at circulars
  • 41% to look for coupons & deals

The top 3 reasons consumers visit an ecommerce store relate to pricing, hence its importance.

In the past, tracking and comparing prices was done by walking to a competitor’s shop and checking their prices. Nowadays all this is done online. Every ecommerce store knows that its prices are being monitored on a daily basis, not only by their competitors (either manually or by using a price monitoring software) but also from consumers.

In fact, major retailers like Amazon, Walmart and previously Jet.com have a continuous price war going on between them.

To fight this war, they have developed software that aids their ecommerce pricing strategy by tracking each others’ prices, and when one of them drops the price, the other one does, too – automatically.

However, for small and even medium ecommerce stores, price wars can be time intensive and difficult. Not only do they have to pay attention to the major retailers and be price- competitive, but they also have to pay attention to competing ecommerce stores, keep a low price and make a profit.

In this article, I’ll share the exact pricing strategies that can beat the competition (from both big and small online stores) while maximizing sales and profits.

Step 1: Set Up Price Monitoring of Your Competitors

More and more ecommerce stores are looking to track their competitors’ products’ prices in a daily and automatic way, or even multiple times per day.

Competitor price monitoring can be pretty tricky, because while Amazon and Walmart have teams behind them building and maintaining their price-monitoring bots, an average small/medium ecommerce store doesn’t.

The main struggles are:

  • Identifying your products in the competitor’s ecommerce store
  • Maintaining the data and updating the software
  • Replacing dead links

However, AI/machine learning has started changing things, making price tracking available to ecommerce stores of all sizes at affordable prices.

According to RJMetrics, there are more than 100,000 ecommerce websites generating significant revenues online. In this competitive landscape, offering the best price is key to beating the competition. Setting up an automatic price monitoring process will save you time and provide you with scale – elements which will help your ecommerce store gain an advantage over the competitors who don’t track prices, or monitor their competitors’ prices manually.

By checking the prices of products on your competitors’ sites and on Amazon or Walmart, you can make sure you will always have competitive pricing – or even be the cheapest one. Of course, this doesn’t have to be done for all your products.

Monitoring all your product catalog doesn’t make sense, because the cost of the software might skyrocket. You need to choose your battles here.

A price tracking data table before export

A price tracking data table before export

Furthermore, by tracking the prices on Amazon, you could possibly offer a lower price, because you won’t be paying the Amazon referral fee as their 3rd party sellers do.

Let’s see how to choose our product battles and make sure we win them.

Step 2: Fine Tune Your Ecommerce Pricing by Picking Your Product Battles

As I said above, if you want to win the pricing wars, you have to choose your battles carefully. Trying to maintain competitive  pricing with multiple ecommerce stores on all your products is going to do you more harm than good.

But, if you make a few strategic decisions, you can have a few products where you are consistently the cheapest store offering them.

As an ecommerce store manager, you have to take a good look at your products and your relationships with your wholesalers/manufacturers and decide which products you can consistently offer at the lowest price.

These questions can help you decide which:

  • Can you make an investment to buy more stock than usual on a fast-moving product in order to drive its wholesale price down?
  • Could a wholesaler/manufacturer give you a better wholesale price after negotiation?
  • Are there any products that only a couple of competitors offer? You can find out by:
    • Checking manually
    • Checking the leading price comparison shopping engine in your country (like Google Shopping)
    • Using a price tracking software
  • Does the manufacturer have an RRP (Recommended Retail Price) or MAP (Minimum Advertised Price)? Do they monitor it? The reason to answer this is that if they don’t have one, they probably won’t mind it if you reduce their products’ prices a lot. But, if they do have a minimum price at which they want their products to be advertised/sold and they monitor and enforce it, you should avoid heavily discounting their products or you could find yourself with a lockout from their products for 30 days!

These are some questions that can help you decide on a selection of products that you can be selling at a very low price consistently, while either making a very small profit or even taking a small loss (also called Loss Leader) in order to get market share. The latter is obviously an aggressive strategy and not always applicable.

Step 3: Use MAP Strategies to Handle Your Undercutting Competitors

First, let me explain a few things about MAP.

The acronym MAP (or MAP pricing, as it’s usually referred to) stands for Minimum Advertised Price. This is a policy that manufacturers issue in order to protect their brand and their retailers’ margins.

In short, each of their products has a minimum price at which they should be advertised (including ecommerce stores’ label price). Price reductions after applying coupons or after adding the product to the cart generally don’t fall under the MAP policy (and increase average order value).

How can you leverage MAP?

Here’s the full process:

Step 1: Find which of your products fall under a MAP policy.

Step 2: Once you do, you can report any competitors who violate that price to the manufacturer/distributor. Usually, they are already aware of the violation, but you can also push them to take corrective measures (like cutting off the supply of products to that retailer for 30 days). Brands that have a MAP policy usually do these things on autopilot, but if they have pushback from other retailers, they are forced to act quicker and more vigorously.

While your competitor will be out of stock, you can sell your products at a hefty margin while staying on the manufacturer’s good books! That’s why many ecommerce stores suggest that their manufacturers/distributors use our software in order to track their MAP prices more effectively, enabling them to better enforce them.

Step 3: By staying on a manufacturer’s good books, you can later tell them:

“I always honor your MAP policy and prices. Thank you for protecting our profits. Usually, brands with MAP policies run special promos for their retailers that honor their MAP prices; have you considered running any promos?”

Almost all manufacturers with a MAP policy do it, and if you ask them, you have a good chance of being included in their next promo.

Their promos can be something simple like using an advertising budget on Facebook to drive traffic to a landing page promoting one of their products, and then telling the visitors to buy that product from your ecommerce store.

Or it can be something more strategic, like letting you in a few days earlier on their new product in order to get a few days of extra sales.

There are more areas you can compete in, though, besides just pricing…

Step 4: Win Customers for Life by Providing Outstanding Customer Service

84% of customers expect a reply to their complaint on social media within 24 hours, and 72% of them expect it within just one hour on Twitter. As a small or medium ecommerce store manager, you can give them a faster and more personal customer service experience to win them.

Let’s see some easy-to-implement examples and how they can make a substantial difference:

1) Celebrate their birthday

It’s very easy to ask the birth date of your new and existing customers and update your CRM with this data field.

You can add a new field during customer registration that asks for their birth date, and you can email existing customers inviting them to fill out this field to receive exclusive discounts.

Now when a customer’s birthday comes, you can simply set up an email to be sent to them wishing them Happy Birthday and giving them a coupon for a discount, or free shipping for this special day.

If possible, couple that with a handwritten wish in their order package, and you have won them for life!

2) Offer live chat every day

According to a Forrester Research study, , 44% of online consumers see live chat as one of the most important features a website can offer.

If you think about it, it makes perfect sense.

When you are looking to buy something online, you might have questions like when it will arrive, questions about the product, or any other question really. And of course, most people are looking to buy fast; they are not going to send you an email to ask you their question and then sit around waiting for you to respond. They will just go to another ecommerce store.

Of course the 7 days a week part can be easier said than done, but it’s definitely possible. You could either outsource it entirely or hire a student to help you during the weekend. With sites like Upwork, it’s really easy to do it.

3) Low Shipping Rates & Increased Shipping Speed

All ecommerce stores should try to imitate Amazon as much as possible in their shipping rates and speed.

Amazon has been pampering customers for some time now with their low-cost shipping and fast delivery, so customers have grown to expect it from all their online transactions. In fact, last year 40% of consumers expected to access Amazon Prime-like memberships within the next 2-3 years.

Of course, it’s not always possible, but if you can promise delivery within 24 hours during business days and maybe free shipping after spending a minimum of $20-$25, it could be a game changer.

To do that, you’d have to shop around for shipping rates, storage or fulfillment centers (you could even use FBA), and you could always negotiate with your current partners for better rates or ask what you could do to get better rates.

Although this falls under customer experience and not service directly, it’s still an important aspect to get more business, even at slightly higher prices.

Actions like the above don’t require a lot of effort and can bring substantial results that can win you the price wars even when you don’t actually have the lowest price.


As technology evolves, the pricing wars will become more and more unavoidable – not only for big retailers, but for small and medium ecommerce stores as well. However, being the cheapest retailer isn’t the only way to stay competitive.

By being strategic, utilizing technology and playing to your strengths as a small/medium ecommerce store, you can win the price wars even against big retailers, get more market share and ultimately enjoy higher profits.

Feel free to drop any questions or additional insights in the comments below!

Author bio: Alex Chaidaroglou is the director and co-founder of Altosight, the most accurate price monitoring SaaS. He has worked for over 6 years in digital marketing and advised various ecommerce stores, as well as software companies. He shares his marketing strategies on his blog, WeeklyGrowth.

Greg D'Aboville Greg is Head of Growth at Wisepops.

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