When an entrepreneur decides to start a business, he is filled with hopes and creative plans. And all attention, as a rule, is focused on developing ideas. We want the future store to be exciting and valuable for customers so that the goods sell well. Great efforts are spent on the design of the store, on advertising. But no less important is the pricing strategy. After all, before you sell something, you need to decide how much it will cost and analyze your inventory Shopify Inventory Planner Forecasting Reports.
Moreover, the prices of goods must be competitive: neither overpricing nor underpricing will help you get rich and stay afloat.
Analyzing prices manually in a store with several thousand products with a good tool will be extremely easy. We suggest you pay attention to the app from Mipler https://mipler.com/
The truth is that the competition in e-commerce grows wildly every year. According to statistics, about 95% of businesses close in the first five years. It is becoming increasingly challenging to stand out among competitors. There are more than 20 million online stores worldwide, growing yearly.
According to statistics, the e-commerce market should increase by 15% in the next ten years. These are colossal indicators!
Therefore, a well-thought-out business strategy and well-chosen tools can be crucial to your success. If you define a tight target market, like Fabulive hair extensions, you can dominate your niche. But you still need to work hard to make a go of it.
Pricing is an essential aspect of business strategy. After all, as F. Kotler wrote: “If the product is the heart of marketing, then the price is its blood.”
Cost per item is the starting point from which the price for the end consumer is built.
Cost per item is the product’s purchase price, the amount the store owner spent for a unit of the product. Or, if you are a manufacturer, the cost per item is the cost of the product.
In Shopify, the cost per item is only visible to you; it’s for internal use, and customers don’t see this field. This field is optional. But we advise you to take advantage of this opportunity. Easily compare the price you paid for the item with the buyer’s price and get an idea of how much profit you’re making. Shipping costs and taxes should be included here.
How can it be useful?
- You can calculate the profit margin and track the profitability or loss of goods.
- You will be able to adjust the pricing strategy:
- Plan purchases of goods without affecting the final price. After all, the supplier has seasonal discounts or price increases on goods. Buy the product at a time convenient for you.
- Plan promotions that are profitable for yourself by analyzing the cost per item.
If you use this feature, sync cost per item from the Manual COGS page by clicking Sync Cost Per Item from Shopify.
So, by tracking the cost of a product, you can dynamically achieve competitive prices in real-time, sensitively responding to demand, geolocation of the purchase, and currency fluctuations. After all, understanding your costs and profits and understanding how demand reacts to this or the price of your product is fundamental. If you overprice the product, it can push the buyer away from you and towards your competitors. If you lower the price, buyers may get the impression that you have a low-quality product, which will also hurt trade. A balance is possible.
Calculating the margin according to the formula clearly shows how much profit or loss you receive from selling goods. This happens according to the following formula:
Formula= ([price – cost] / price) * 100)
The price of the product, for example, is $10
Manufacturing cost = $6
Gross margin = ((10 – 6) / 10) X 100) = 40% of your profit (margin).
Shopify can also automatically sync “Cost for Item” to display. You can enable this synchronization by clicking “true” in the “Synchronize cost for Shopify item” selector.
- Enable sync with caution: Daily sync has certain limitations. After all, tracking the costs of a product today will not help to track the profit for the past month, but only for today.
Among the amenities:
- Import a new price list to update the prices of items in the store.
If bound to a skull, you have a price list from a supplier where the price is specified to rename the SKU and Cost columns to Variant SKU and Variant Cost and import the updated price list.
Setting up the Shopify admin panel can be challenging for older users who could be more computer savvy. Installing an intuitive add-on with visualized data can be a good solution. With the Mipler Advanced Reports application, you can manage all your reports with a user-friendly interface.
In addition, it will be more convenient for you to export data with the help of free integration with Google Sheets. Products are exported automatically using the Shopify integration with Google Sheets.
The Mipler Advanced Reports application is compatible with Shopify Plus stores and allows you to combine data from several stores into one report, which, you must admit, is very convenient.
Bottom line:
- Track cost per item to correlate product prices and track profits.
- Choose convenient tools that automate your store’s data analysis and simplify your life.