Pricing is an important aspect of running a successful B2B business. But exactly how important is it? What considerations should you take into account when you determine your wholesale pricing? What other factors aside from price are important to consider also? How should you price your goods? There are many questions to ask, and the below pointers should help you understand the importance of pricing in B2B.
Continually evaluate and evolve your pricing strategy
There is not one single pricing strategy that fits every B2B business. One pricing method cannot be applied to every situation. There are too many business variables. If you find a suitable pricing strategy, do not get complacent and stick with it indefinitely. The B2B business world is continually changing. Therefore so should your price. Evaluate your prices on a regular basis and change them to suit changes in the market. If you are offering a discount on a certain item, how long should it be continued for? If you are giving a discount to a certain customer, but they are not meeting their bulk buy obligations, should you continue giving that discount? Evaluate and evolve!
Never simply lower your prices to rock bottom
B2B businesses often have a tendency to simply offer extremely low prices to generate business. While this may seem like a fine idea, it can often be counter-productive. Pricing is not always the number one priority that businesses look for from a supplier. Nowadays, service and quality are just as important as price. Having rock bottom prices but a poor service or inferior quality product will never work. You would be surprised at how many businesses are willing to pay that little bit extra to receive a timely delivery or exemplary customer service. Don’t sell yourself short!
Combine great prices together with great service
An effective way to operate a B2B business is to ensure that you provide a high-quality service together with a suitable pricing strategy that reflects your service. As mentioned above, service and the end product is just as important as price. Concentrate on providing an unparalleled level of service to your customers, and then the price will fall into place naturally. Is your service professional? Do you cater fully to your customer’s needs? Do you offer any extras? Is your range of products manufactured to a high standard? Before even contemplating pricing, you should first ensure you can meet your customer’s demands.
As you can see, pricing is hugely important in a B2B environment, however, other business factors have a sizeable influence too. When creating your B2B pricing strategy it is imperative that you consider your business as a whole, and do not get bogged down with the bare figures and margins. There are many roadblocks to better B2B pricing, however providing you formulate your prices in a careful and considerate way, there is no reason why you will not get it right.