Learning from these 4 Magento wholesale pricing strategies to price smartly. Finally, don’t forget to look through a Magento wholesale pricing extension for the best support. Start now!
Pricing has always been one of the most critical jobs that Magento store owners care about while running an ecommerce. The product’s price directly affects how much sellers earn per purchased item and how competitive that product is. Smart pricing, for that reason, is the secret to profits in an industry with intense competition.
Right now, we are going to make clear the statement.
The Importance of Pricing in B2B Scenarios
Pricing plays a strategic role in B2B. Not only affects the seller’s profit, but pricing also helps stores to target profitable customers effectively and is a means to maximize sales.
Target profitable customers effectively
Pricing should be consistent with the customer base that your online store targets. There are very few businesses good at serving consumers at different levels of financial capability. Depending on who are profitable customers, proper pricing allows your store to target those people more easily.
On the other side, you also can create barriers for unprofitable or unwanted customers using your pricing strategy.
Highly affect seller’s profit
Prices obviously affect your profit in any way. It must be pressed that people have to deal with more complicated problems and requirements in B2B. So, you will likely to get low margins if you do not have a wise Magento wholesale pricing strategy. In the worst result, the revenue even cannot make up all costs and risks (no profit)
A means to maximize sales
A typical feature of B2B in general or Magento wholesale pricing is quantity discount. If buyers want to receive a wholesale price for their orders, they have to buy as many as a required threshold of the products.
Otherwise, you can specify different discounts for each threshold of order quantity if buyers reach them. This is a common and effective way to boost sales.
Because of those reasons, every Magento wholesale website needs a proper pricing strategy in order to not only make profits but also maximize the profits.
The next part refers to 4 Magento wholesale pricing strategies with their pros and cons and recommended tips.
Let’s get started!
4 Successful Magento B2B Pricing Strategies to Maximize Profit
How to offer an attractive Magento wholesale price?
1. Tier price (based on quantity)
Tier pricing allows you to offer quantity discounts for specific customer groups when they purchase products in bulk quantity. This is one of the best promotional programs commonly used to encourage customers to buy more and more. However, this Magento wholesale pricing strategy actually doesn’t work for all business types.
Tier prices will be shown on catalog pages or product detail pages with a short message. Here is an example of a Magento wholesale price using tier pricing:
- Buy 6 to receive a discount of 10%
- Buy 12 to receive a discount of 15%
- Buy 24 to receive a discount of 20%
- Attracts more buyers at different needs of quantity and creates a lower barrier for those who do not want to order at the highest threshold but still save from a lower discount. In other words, they have the option to choose which they can afford.
- Doesn’t work for all products and services
- Make accounting more complicated
You should only apply tier pricing if your products are in high demand or considered “needs,” not “wants.”
Besides default functions of Magento, you also can get support from Magento Tier Price extensions to level up tier pricing features in the backend. For example, Magento 2 Tier Price by Mageplaza is an extension that allows you to offer tier prices to customers more attractively through the automated pricing table and sounding notice. Customers will have a better shopping experience thanks to this tier-price innovation.
# How to add Tier Price in Magento 2?
By following these steps, you can add a tier price for any product without difficulty.
- Open the admin product grid from the backend, choose the product to which you want to add a tier price
- Below the Price field, choose Advanced Pricing
- Click Add in the Customer Group Price section
- For each tier, you have to choose websites and customer groups to apply tier pricing,
- Enter a fixed amount or percentage amount in each tier by setting Price to “Fixed” or “Discount”
- Click Done and then save the tier price
2. Customer group discount
Customer Group Discount (Customer Group Price) is a promotional campaign in which a discounted price on any item can be extended to members of a specific customer group while they shop by their accounts. The discounted price is shown on the product page with the regular price noted below.
Customer Group Discount is a type of tier pricing based on customer groups but has a quantity of 1. Therefore, it is similar to tier pricing based on quantity in settings and configuration.
With this Magento B2B pricing strategy, you can offer better deals for a customer group that you think is more profitable or important than others to motivate sales.
Magento 2 Customer Group Pricing by Magestyapps is a helpful module which improves default pricing functions such as:
- Completely replace regular prices instead of showing them below customer group prices
- Use customer group prices for layered navigation filters
- Work well with all product types
3. Special price
Special price refers to a special offer in which products and services are offered at reduced prices or rates within the exact time. During this time, the special price appears instead of the regular price and is followed by a notation that shows the regular price.
Customers can see special prices both on catalog pages and product detail pages.
- Giving products special prices is a quick way to drive sales as customers always love a good deal for their money
- This is also an effective way to clear out old-stock products from the last season or at the end of a season
- Customers can be suspicious that the quality may have suffered of or it wasn’t worth the price
- A special price campaign can attract the wrong attention from customers who just come in because of a good bargain rather than need and appreciate your products.
- Special prices obviously result in the cut in your profit like what the name implies
Before making a decision on which pricing strategy will be used, it’s crucial to define if your goal is clearing stock or building loyalty. If you target customers’ loyalty and aim to nourish a long-term relationship, tier pricing should be a more suitable choice.
# How to set up Special Price in Magento 2?
Setting up a Special Price in Magento 2 is super easy. The very first step is to open the detail page of the product that you want to add a special price, then follow these steps:
- Under the Price field, choose Advanced Pricing => Special Price
- Enter the amount of the special price
- Choose a Start Date and End Date to apply the special price
- To finish, click Done => Save
4. Custom pricing per customer
Custom pricing per customer is a strategy in which you and buyers can negotiate for the final price of a product. Thanks to this feature, you are able to utilize an individual approach to buyers. This pricing strategy becomes popular in B2B because each order contributes a significant amount of revenue of sellers, and custom prices per customer allow them to easily get orders from different types of customers.
- Buyers have a chance to negotiate a price at which they are willing to buy. Obviously, that price cannot lower than a profitable amount of you (the seller). As a result, you can not only expand your customer base but also optimize sales.
- Once your prices are flexible, you will reduce the leakage of information related to competitive advantages since customers have to negotiate prices with their accounts.
- Otherwise, this Magento B2B pricing strategy also gives you more insights into customer behaviors and reflects demand effectively.
- Need support from additional extensions or modules to optimize the order process and make it smooth.
- Custom prices per customer may waste time to adjust the deal for specific customers.
Magento 2 Request for Quote is a module that allows customers to submit their quotations to your store so that they can get the most enjoyable prices.
Because of its practical help, let’s CHECK OUT Magento 2 Request for Quote to create a professional quote negotiating process.
Otherwise, there’s no difficulty in finding a Magento wholesale pricing extensions which allow you to create custom prices per customer such as Price Per Customer Magento 2 Extension. By installing the extension in the backend, you can create specific prices for a specific product per customer or set up percentage discounts for all products per customer.
What should you consider to select a pricing strategy?
Before you choose a pricing strategy for your products, it’s especially important to answer these questions:
- What is your business goal at present and for the short term? (profit, brand awareness, loyalty, clearing stock, etc.)
- If possible, you should also connect with your goal in the long run.
- Which typical features of your customer base that you should keep in mind and drive your decisions?
- In which your target customers most care about? (price, quality, brand)
- Which pricing strategy is applicable to your products and will work with your customer base?
Finally, the understanding of those problems may drive you to a wise decision.
The blog is not everything about Magento B2B pricing strategies, but BSS Commerce hopes you guys understand the most common strategy that can be easily implemented in your Magento store. We welcome all comments and suggestions for other effective pricing strategies via the comment box below.
For more solutions for your Magento B2B website LET’S READ “20+ B2B Extensions for Magento 2 Community Edition.”