How to price for e-commerce

In marketing, there is the so called ‘psychological pricing’.

This is a pricing strategy where customers respond to pricing in an emotional manner or non-rational manner.

There are several psychological pricing principles applied by marketers. You can use three of the popular ones for your e-commerce business, namely: brand image, social proof, and pricing number (most popular one for retail).


How do customers differentiate your brand from competitors? You must prove that your brand is the better choice.

This entails establishing your unique value proposition (UVP). UVP simply means the outstanding feature or benefit that your product has that is differently advantageous or non-existent in your competitors’ products. UVP sets you apart from competition.

If you are selling children toys, for example, you may have building blocks that teach toddlers how to pronounce letters of the alphabet.

Even if you set a higher price for this toy, parents will be more than willing to buy it.

Another angle to the brand image approach is that brands priced higher are perceived to have good quality.


You have seen this already. Product rating, product reviews, and even testimonials.

It is now very common in online purchasing that prospective buyers always look for the number of stars a product or service has, positive reviews, and candid testimonials from previous buyers before they decide to buy.

Positive social proofs are indications that customers who had previously bought your product are satisfied with it.

Potential customers are encouraged to buy your product if they see that those who bought it before rate them highly and even endorsing them.


This is the most common tactic in psychological pricing. You have seen this oftenly used in department stores and supermarkets.

Using 399.99 THB instead of 400.00 THB. The psychology here is the first number of the price. When customers see it, 3 looks lower than 4.

Tagging a product at 295 THB instead of 294.99 THB. A shorter price with 3 digits only looks lower than that with 5.

Remember, you do not have to set the lowest price to beat competition. No one eventually wins in cut-throat pricing.

Profitable pricing takes into consideration how your customers perceive your brand and prices. Thus, marketers have long used psychological pricing in their strategy. It has always worked. You too can use it in your e-commerce business.

What else? You too may have some creative pricing ideas of your own.