In-store and eCommerce product pricing

[shopfybr]

I have a dilemma about how I price our products. We share the same inventory and pricing for both in-store and online. I mainly stick to MSRP because I figure if people are price shopping online, then we can compete.

However I know many businesses go higher than MSRP for brick and mortar because cost of doing business is higher. Someone just today told me I need to raise my prices and I won't be able to make it if I don't.

What do YOU do??

[Abigails_stl]

So many factors to figure out. Pricing depends on the industry you are in, your location, and really what margin you need to survive. We have a gift store and the industry average is keystone pricing and most MSRPs are double the cost. We just opened an apparel store where the average is more like triple the cost. We decided on going with pricing at 2.5x the cost because we didn’t want to price our store out of our neighborhood. I have seen some our same merchandise at 4-5x the cost in other more affluent areas of our city, but I know for a fact that their rent is 3x what mine is. 
The most important thing i can tell you is that you can always lower your prices but it is very hard to raise them. Maybe think about what you would be willing to spend on the said items and start there, or do some comparison shopping in your neighborhood or one similar… look for items or brands you sell and see what they are getting for them and then ask yourself if buying from you will have more or less added value (ex. Free gift wrap) and go from there. 

[shopfybr]

Some good ideas here. Thank you!

[Flickerifts]

We own a brick an mortar. most keystones are 2x, however, we add additional 10% to cover shipping, an additional 10% to cover selling supplies (tissue, bags, etc.) Prices are relative to the industry so check around to be sure you are in the ballpark. You can use a high/low method as well. We do this often. If product comes in that doesn't have a good enough markup, offset it with a product that you can markup more. As an example- if you pay $10 for one blouse, and $10 for another, but one is better quality, charge $20 for one and $24 for the other.  Also figure out what my family used to call "the nut". It is what you need to make on a daily basis to just cover costs. Example: Add up your monthly rent, utilities, insurance, website fees, labor, etc., then divide by the number of days you are open.  Then multiply that number by 1.5 (to cover cost of goods sold). That is your "nut.  Always make sure you cover it. Anything over should be profit. Bets of luck to you.

[Levibrown78]

I like what you are implicating in your business I think you will remain doing well and get stronger each year with company growth and high sales with well rounded margins for everybody I would love to partner with you.

[cprsafety]

I have similar dilemma. I have to raise prices because our landlord doubles our rents going forward.  The problem my prices put me above most competition as many works out of their home and don't have the costs I do.  Pricing will either save me or put my out of business.

[PerroneTech]

Shopping in-store is an experience. Make sure to use that to set you apart from the rest.

[TCSlaguna]

I agree with @PerroneTech that shopping in-store is an experience. That is the added value that one's store is supposed to bring. 

We have the same dilemma when it comes to determining how to price our products. We try to avoid vendor names in product titles, and try to provide some more information in the product description than one may find on other sites. Our online sales right now are small compared to in store, but I like to consider the online store as a showcase of what we carry in store to encourage customers to stop by and get the full experience. 

[DLRosenberg]

We do not differentiate between e-commerce and in-store pricing. In my head, those items are all available in-store and therefore have to "pay rent" to be there.

Our average markup across all products sold is 3x- but some of our bespoke, handmade items only have a 40% markup because we decide to pay the makers 60%.

We do run a live instagram sale every friday night where we sell all new items that come to the shop for 15% off- we do this because customers are excited to get first glance; everyone loves a sale; and we're turning product before they have to "pay rent' on the selling floor.

There are a couple of other decisions that figure into mark-up such as footprint. For example if I am only taking a 40% markup on something but the retail footprint is small and I have the potential to earn a lot of $ per square foot, then it makes sense. If something is very large, even at 3x markup, it is taking up space I can fill with multiple products.

For us particularly- our book room has worse sales per square foot than our jewelry area- because books are larger and are keystone.

[TCSlaguna]

@DLRosenberg How smart to do a discount on items before they hit the store floor!

What about items that have been sitting for a while? At what point do you discount them? 

[DLRosenberg]

If we have items that are sitting for some time we try and package them in a mystery box which we offer seasonally or we offer a discount on them.. we are thankful to not have to discount that often and most of our items are sorta ever-green so we don't discount them

[PM1973]

On my website: https://www.shadowsinthedark.com/ is have Retail set up for (MSRP) pricing for the products and services i sell. However i do offer discounts for them as well. Depending on the items (Braille Products/Services) are set for 20% Discount while the Gift items on the site are set at 25% off.

[Bronze_Palms]

So interesting - I don't know why I didn't factor in the cost of rent. It is the highest expense on my P&L...

My online listings are more expensive that my brick and mortar prices because of retailer fees.

[DLBucher]

This is a question asked daily on my FB Retailers page.  I have a booth locally and a online store. I sell Dixie Belle Chalk Paint and Wise Owl Chalk Paint and various other furniture art supplies.  Online everything is priced at MSRP BECAUSE I'm competing against every other retailer INCLUDING Dixie Belle and Wise Owl.  I ship all over the USA.  In my booth every product is marked up 20% to cover the cost of RENT, SHIPPING, & COMMISSION.