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  1. #1
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    Pricing question
    Greetings all,

    First, thank you for all the valuable input from my previous questions.

    Next is a pricing question. A competitor sells retail online for 23.99. They also sell their product to the wholesale market.

    I plan to use their product in my store as my loss leader, by ordering at wholesale price, and selling at almost wholesale online. Planned profit will come from my own items. Their licensed merchandise will help drive traffic with the brand awareness of the properties.

    So, if i plan to sell the items at about $12 (after discounts etc) - should i price it everyday at 19.99 and then give promo codes on banners for affiliates to use at 40% discount....or......... should i price it at 23.99 with a 50% promo code?

    Ultimately, looking to drive the most traffic and therefore increase sales for ourselves and the affiliates.

    Thanks in advance.

  2. #2
    OPM and Moderator Chuck Hamrick's Avatar
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    If you want affiliates to promote it give them a coupon code.

  3. #3
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    Hello,

    Thanks for the reply.

    Do you suspect there would be a big difference in response if the promo code is 50% instead of 40% ?

  4. #4
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    perhaps i am using wrong terminology. is coupon code same as a promo code?

  5. #5
    OPM and Moderator Chuck Hamrick's Avatar
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    Yes 50% is better than 40% and yes coupon code is what we use in the US where promo code is more Euro.

  6. #6
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    ok, one more thought in this string.........

    do you suspect sales results will be better if:

    a) offer the 50% coupon code to affiliate, plus 10% commission to affiliate

    or

    b) offer 35 -40% coupon code and 15 to 20% commission to affiliate
    ?

  7. #7
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    Quote Originally Posted by hotei108 View Post
    So, if i plan to sell the items at about $12 (after discounts etc) - should i price it everyday at 19.99 and then give promo codes on banners for affiliates to use at 40% discount....or......... should i price it at 23.99 with a 50% promo code?

    Ultimately, looking to drive the most traffic and therefore increase sales for ourselves and the affiliates.

    Thanks in advance.
    If you are planning to drive traffic and you are willing to sell it at $12, why not just listed at $12?

  8. #8
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    i was trying to structure it so that affiliates would have something special to offer and provide an incentive to work with us.

    is there a downside to this?

  9. #9
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    Quote Originally Posted by hotei108 View Post
    i was trying to structure it so that affiliates would have something special to offer and provide an incentive to work with us.

    is there a downside to this?
    Not all affiliates do coupons. So yes, to the non-coupon affiliates it is a downside. I personally prefer merchants who don't offer coupons, or merchants post the coupons on their own sites.

  10. #10
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    hello,

    thank you for the input.

    i had not considered that some affiliates may not want a coupon.

    i had thought to take that route for two reasons: 1) to offer affiliate customers a special deal 2) to keep the full line price on site so as not to make the other items look to expensive in comparison.

    how would a coupon on my site work? sorry......don't understand.

  11. #11
    OPM and Moderator Chuck Hamrick's Avatar
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    a) offer the 50% coupon code to affiliate, plus 10% commission to affiliate
    That is better for couponers but its difficult to offer B to non-couponers.

  12. #12
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    Quote Originally Posted by hotei108 View Post

    how would a coupon on my site work? sorry......don't understand.
    Some merchants offer coupons on their sites periodically, and post a code to apply the discount. That usually helps to seal the deal.

    For example, an affiliate send a potential costumer to your site from one of his/her product review site, when the customer see another 20% will apply upon checkout(provide that you post a 20% off coupon code on your site), he/her will more likely to proceed to checkout.

    However, if you have a box "Do you have a coupon" on the checkout page and he/her couldn't find anywhere on your site, the customer will leave your site and go searching for a coupon. Who knows what will happen during the web surfing, he/her might find a better deal from your competitors, he/her might be distracted by some other things and completely forget your site...

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