All eCommerce stores should be concerned with their pricing.

Price too low and you run the risk of not being able to make a healthy profit. Price too high and you run the risk of not making any sales.

With all the other tasks you have to do as a business owner, pricing often gets left to the wayside. But ignoring costs is detrimental to your business growth. If you only focus on what your competitors are doing, you stop yourself focusing on your own business.

It shouldn’t be this way though.

Using a competitive price strategy will enable you to stop price-matching your competitors or trying to race-to-the-bottom where you only adjust your prices to compete with your competitors.

In this blog post, we’re going to look at 5 competitive pricing strategies you can use to outsmart your competition and increase your profit margins.

Let’s dive in!

1. You don’t have to be the lowest priced vendor

It’s all too easy to track what your competitors are doing with their pricing by using an automated competitor price monitoring technology.

Consistently trying to undercut your competitors not only devalues your products and brands but stops you from seeking out potential price increase opportunities.

Despite 87% of Americans citing price as the most important factor when shopping online, there are still ways you can price competitively without losing profit.

If you are targeting customers who are looking for a great deal, then why not see how high you can price your product, without pricing yourselves out of the market?

For example:

If your lowest price competitor is charging $50 for the same item, you don’t need to charge $22. Charging $40 still puts you below your competitor, but not too low that you can’t make a decent return on profit.

2. Know and understand your value

When it comes to your eCommerce business, ask yourself: what makes us different? Finding your unique selling point will help you stand out from your competitors. It will give customers a reason to shop with you rather than the competition.

And if your value proposition or USP is strong enough, you will find customers returning again and again. A differentiator could be something as small as your product being made in your home country such as “Made in the USA.” Or it could be something more lucrative such as pricing. For example free delivery or special offers.

Let’s take a look at UK Supermarket delivery chain, Ocado. They’re known for being one of the most expensive places to buy groceries. However, they don’t need to compete with the lower priced supermarkets on cost because they’ve got their USP nailed down.

They don’t mind being more expensive than their competitors and to encourage first-time buyers to try their service, they offer £25 off the initial order as well as free delivery for a year.

With a hook like that (and great customer service), first-time buyers might consider going back there to shop, even if it is more expensive.

When you’ve priced your products in accordance with their value and your company’s value, the price becomes largely irrelevant.

Customers no longer look at the price of the product, but instead they’re paying for the value they’re receiving. Work out how much people are willing to pay for your items, regardless of how much it costs you.

Think about upmarket clothes that cost a mere fraction than for what they sell for in stores.

3. Your customers are reactive, but you can be proactive

How many times have you considered looking at the history of your pricing? Even if you’re using a price comparison tool, how often do you look at what your competitors previously sold their products for?

If you haven’t, you should start doing so. In general, no product stays the same price during the entirety of its life cycle.

It will undergo discounts, special offers, holiday deals etc. Having knowledge of how your competitors have fluctuated their prices throughout history will allow you to proactively prepare for your own pricing strategy.

For example, suppose you run a business and you see that your competitor decreased their prices during Thanksgiving and has done so for the past three years. This would allude to it being a lucrative idea.

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So instead of waiting to see how much they decrease their prices by this year, you could pre-determine this and send an email out to your customers (before your competitor) letting them know about your new Thanksgiving deal, hoping to secure a few early orders ahead of time.

Remember, when your customers are ready to buy, they’re ready to buy now. In general, the price they’re looking at is the one in front of them.

You don’t need to take the same approach though. Look at pricing, not as an on-the-day task but a journey through the lifespan of a product.

4. Take advantage of your competitors out of stock items

Your customers care about how much an item costs, that’s the truth. But they are also willing to pay extra once they have their heart set on buying the item.

Consider this example. You go to website to buy a jacket item, only to find it’s out of stock.

You are then forced to either find it on a different store or buy it at a later time.

If you do have your heart set on it, then your only option is to buy it elsewhere and if the price has increased on a different website? You’re more than likely happy to pay the increased cost.

If you want it badly enough, the price doesn’t matter.

Customers consider both availability and price at the same time. Therefore, if your competitor’s product isn’t available, they’re more than likely going to seek out the same product elsewhere. This is because shopper’s choices are now limited and so they’re more willing to pay a premium.

Use this to your advantage and consider raising the prices of products when your direct competitors no longer have it in stock.

5. Make use of a loss leader

The loss-leader competitive pricing strategy is a smart one to make if you’re offering a range of different products.

Here’s how it works: you sell one product at way below market value which encourages people to come to your site.

Once they’re on your website and start seeing the other products you sell, shoppers may think “I’m here now, I might as well buy some more, especially as I made a huge saving on X product.”

So although in terms of profit, and compared to your competitors, you may be running at a loss at certain items, it does increase your chance of being able to cross-sell or upsell other products to those same customers.

For example, Dell could’ve implemented the loss-leader approach with their printers and inks.

We don’t know how much the printer cost to make, but it retails at $17.29. For many people that might seem cheap, and you may wonder how Dell is able to make a profit from its printers selling products so cheap.

But then we look to the ink (where the real money is made).

The ink is over double the price of the printer.

Their entire basket value increases and the loss you made on that first product is rendered obsolete because what’s the point in buying a printer if you don’t also have the ink to go with it?

While loss-leading pricing approach is one to consider, don’t overdo it or you’ll become a commodity store and your customers will come to expect everything at discount or bargain prices.

Not a good move if you hope to raise your prices in the future.


Pricing competitively is a difficult task. One that involves continuous research into your competitor’s current and past pricing models.

However, it’s limited to simply think about competitive pricing as a ‘your prices vs. your competitor’s prices’.

Take some time to read through the pricing strategies outlined above and see whether you can implement any of them into your eCommerce business.

Just because you’re in eCommerce and will be faced with many competitors, doesn’t mean you have to race to the bottom to make your prices the cheapest.

What competitive price strategies have worked for you? Leave a comment below.