Price is one of the integral deciding factors that customers consider when making a purchase. When you position your product in a new market, the best and most used marketing strategy is often used to launch the product, the “marketing mix.”
Factors to Consider When Pricing Your Print Products (Using the 5 Ps of the Marketing Mix)
The 5 Ps of the marketing mix stand for Product, Price, Place, People and Promotion, and so you need to make an informed decision about pricing to ensure your launch is successful.
According to a recent study, print-on-demand is a growing market and is seeing higher adaptability, due to which the market will witness a CAGR of 26.1% from 2022 to 2030 (Source:) The reason for such a significant increase is that people are looking for custom and exclusive products in the market and are willing to pay a premium for exclusive products.
But how do you decide if you’ve priced your product to justify the quality and still provide customers with optimal value for money to make it affordable? Well, there are many different factors that you need to consider when determining the price of a custom print product.
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Although every market is different and target customers are also different, the 5 P’s of the marketing mix are the points you keep in mind when deciding on price, and we’ve listed the factors as part of these 5 P’s to give you a checklist. to follow
The print on demand market is segmented into print on demand software and print on demand service. Platforms that provide delivery services or final fulfillment of goods are divided under the category of services.
Online design tools or platforms that provide APIs and integrated software solutions are the second segment. This segment has seen high adoption by business traders as it provides seamless and cost-effective on-demand printing services.
In this model, customers integrate an online design tool with an existing e-commerce or their online platform and sell custom products using web printing solutions also known as online product design tools.
If you are a business that uses a print-on-demand service, the best way to price your products is to determine the average price of the competition and your target market first. It is important to price a product that provides you with a good profit margin as well as around the average price of competitors.
Price equation. product price + service cost + average profit margin to keep the price in line with the market average.
Determining the price of a product for the print-on-demand software market consists of many different aspects that a business must consider:
- Design valueintegration cost or design cost
- Platform committeeFor enterprises using design platforms APIs
- E-Commerce FeesThe fee that online marketplaces like WooCommerce, Shopify, and others charge for each sale.
- The cost of the main product
- Shipping and handling costs
- Price equationDesign cost + product cost + platform cost + profit margin = optimal price for your product
There are many different styles that the platform can use to determine the price of a product at a given time and market.
For example, different platforms charge a premium for certain customizations and customization features, while some provide them for free.
Another pricing method that platforms use for all types of print-on-demand is custom pricing for selected customizations. For each customization a customer selects on a product, the price changes in real-time, so each product can be priced based on the unique customizations customers select.
Each target market has a different fit for a particular product and therefore they may be charged differently based on competition, market demand and other such target market factors.
This method of pricing is called a price discrimination strategy, where sellers charge different prices for the same product in different markets. There are 3 types of price discrimination: first degree discrimination, second degree discrimination and third degree discrimination. The first tier is based on the maximum price charged (rarely used), the second tier is based on the quantity purchased (widely used) and the third is based on the customer group (seasonal occupancy).
To explain this clearly, here is an example of how a print-on-demand platform can use price discrimination:
If you sell a t-shirt that can be printed on demand, here’s how you can use a price discrimination strategy:
- First degree discriminationPlatforms may charge a premium or higher price for topics or movies that are currently trending. For example, customers in Argentina will be willing to pay a higher price for a custom shirt that will now be based on Lionel Messi or other similar soccer shirts after winning the World Cup.
- Second degree discriminationPrint on demand can be used for minimal printing and shipping, but there is always a way to charge the buyer more or less based on the number of t-shirts customers purchase. If a sports club wants to order their jerseys in bulk, you can give them a discount for bulk purchases and the same can be a premium if the number of uniforms is less.
- Third degree discriminationPrint on Demand can be used for both B2B and B2C business models. For the retail market, you can use a pricing policy where you provide discounts to a group of customers such as senior citizens, students, women and other such categories to attract new categories of customers. In B2B, you can provide group discounts to corporate accounts as they may have higher requirements.
There are different customer segments for print on demand businesses. There are loyal and repeat customers, there are frequent buyers, and there are new customers. Some customers are of different age groups.
Pricing for print-on-demand products can be based on who is buying your product. For example, many businesses provide discounts on the first purchase to encourage new customers to buy the product, and some businesses provide price promotions for subsequent purchases or repeat sales.
When you launch a product in a new market, marketing costs will be higher as you enter the market to build a strong presence. Additionally, there are different seasonal times when you should decide the price based on the occasion.
Right from holiday sales to online promotions like Black Friday sales and more, there are many different occasions when you will have to change your price. The price should be assessed based on the demand, customer group and the season the business is targeting.
For print-to-order products, the product price may vary or change based on any of the above factors or the P of the above mix. Thus, it is important that businesses evaluate their price frequently and change it based on the time, market, occasion, promotion or the place they are marketing to.