Top B2B Ecommerce Pricing Strategies for Your Business

There’s no single way to price your B2B ecommerce product. In fact, many businesses use a combination of pricing strategies.

Your brand has its own product and target customer base. You need to choose a pricing strategy that accommodates the unique requirements of your business. Here are some practical B2B ecommerce pricing strategies you can apply, along with pros and cons for each.

Competitive Pricing

Competitive pricing is one of the most common B2B ecommerce pricing strategies. You analyze the pricing offered by competitors and choose a price based on that information. Usually, brands try to keep the price as low as possible to get an advantage over other companies, and they often use an average of the pricing from other brands in the industry.

This strategy is a good way to break through customers’ initial pricing filters, but it doesn’t consider the product’s features.

Pros

• Competitive pricing doesn’t depend on too many factors, making it simple to plan and implement. Leads who are price-sensitive might be attracted to your product offering.
• With the cost of B2B products making a considerable impact on the final decision of 40% of buyers, you can generate a significant number of sales.

Cons

• The only differentiation in competitive pricing is the low cost of the product. If a competitor manages to beat your strategy by offering a lower price point or a discount, customers might be quick to switch.
• Offering a low price also decreases the profit margins. If there’s any oversight in calculating the product’s actual cost, competition-based pricing might lead to losses.
• Attracting leads based on price undermines the value of the product. If you want to establish an authoritative or premium B2B ecommerce brand, there may be better strategies than competitive pricing.

Dynamic Pricing

In dynamic pricing, the product price is flexible and changes depending on your leads’ industry, requirements, and budget. Instead of a fixed, upfront pricing that’s accessible on your website or social media accounts, dynamic pricing is decided only after interacting with leads.

When a lead reaches out for a quote, you can collect the necessary information, such as the company size and revenue, to offer a customized quote.

Pros

• Dynamic pricing works well for products with a wide target audience with different company sizes, use cases, and budgets. You can quote a price depending on each customer’s specific requirements instead of taking a one-size-fits-all approach.

Cons

• While dynamic pricing accommodates a larger customer base, 51% of B2B enterprise buyers want transparent pricing. If your website doesn’t display an estimate or at least a price range, buyers may not consider your products during research.

A quick workaround for customer reluctance to this strategy is offering a website price calculator on your website to provide a rough estimate based on selected inputs and then give a call to action for more details.

Number-Based Pricing

If your product relies on how many users there are, such as a certain number of employee accounts or client profiles, number-based pricing may work best for you.

Using this B2B ecommerce pricing strategy, you can predetermine the cost of onboarding each account or adding each client profile. When customers state their requirements, calculate the total cost considering the predetermined user numbers.

For example, you can set the product price for companies with 2-10 members, companies with 10-50 members, and companies with up to 100 members. For anything above that, you can ask companies to reach out for custom pricing.

Pros

• This pricing approach is suitable for B2B ecommerce businesses that target companies of all sizes — from one-person teams to large enterprises. If you offer bulk discounts, it can help attract a higher number of large-scale businesses.

Cons

• Smaller businesses may find your product expensive if you’re incentivizing larger user sets. If your product offers features that aren’t useful to smaller businesses, they might be unwilling to invest in a brand that caters to a large-scale business audience.

Customer-based pricing

In a B2B business, customer segments can vary widely based on the volume, value, and timing of purchases. Customer-based pricing helps you cater to these segments by personalizing the price for each customer type.

For example, you could apply a bulk discount to the pricing for a customer who places large purchase volumes. Similarly, a buyer who purchases your products every quarter can be offered incentives for continued frequent repeat purchases.

However, such custom pricing doesn’t need to apply only to sales volumes. They can also apply to customer groups of varying sizes, including groups of just one buyer. You can display pricing personalized to individual buyers or buyers who are part of a larger team from the same company.

Pros

• Each customer segment gets tailored pricing that fits their buying patterns and needs.
• Customer-based pricing helps improve customer loyalty, by helping meet the client’s needs.
• You can also personalize the B2B ecommerce customer experience with a customer-based pricing approach.

Cons

• There are not many cons of customer-based pricing. However, you need to analyze customer and purchase data in depth to properly segment customers and display accurante prices.

A reliable B2B ecommerce software, like k.ecom, can help with personalizing and displaying the prices to each customer segment.

Packaged Pricing

Packaged pricing is a logical B2B ecommerce pricing solution that plays on the idea of grouping items. If you offer multiple products or product extensions, you can group complementary products and price them as a bundle.

For example, buyers who are looking for ecommerce website designing tools may also want web hosting and website security. You can create a bundle of these products and services and price them with a discount.

Pros

• With packaged pricing, customers are easily upsold on other services you offer as part of the bundles. You’ll end up making more profits as leads might prefer fairly priced bundles over individual products or services.
• This pricing method often improves customer satisfaction as you address multiple customer pain points in a single offering.

Cons

• While there aren’t many cons to packaged pricing, keeping your offerings available outside of bundles is important. If it’s an all-or-nothing deal, customers who want to engage multiple vendors or are very budget-minded might look elsewhere.

Tiered Pricing

Tiered pricing is a strategy where B2B ecommerce brands offer different pricing “levels” for the same product based on usage, perks, and access to features. Tiers are usually priced low to high, with the lowest tier offering the fewest perks.

Many B2B companies use an introductory free tier as a free trial. Customers can choose the basic tier for a free product trial and can upgrade if they want access to premium features.

Pros

• Multiple pricing levels allow you to target a large number of businesses with varying sizes, specifications, and budgets. You can allow each business to choose a tier not just based on the price but also based on the feature requirements.
• Smaller businesses can simply opt for lower-priced tiers instead of purchasing the entire product and paying for features they don’t use.

Cons

• Even if tiered pricing allows for the expansion of your customer base, you need to be careful when justifying the price value of each tier. If customers opt for higher tiers but don’t see equivalent benefits for the premium they are paying, it decreases customer satisfaction.
• Moreover, customers on the lower tiers may switch to competitors if they find a better, feature-packed deal.
• If you’re offering a freemium model, very few customers may actually switch to paid tiers. According to FirstPageSage, the freemium conversion rate is only between 2.6%-5.8% across industries.

Penetration Pricing

If you’re a new company or have launched a new product offering, you can offer heavy discounts to penetrate the market. This strategy, called penetration pricing, draws attention to new products, encouraging new customers to try them at the lowest prices.

Remember, these discounts aren’t intended to be permanent. Once you onboard enough clients to get testimonials and generate word-of-mouth, you need to switch to a different pricing strategy to maintain profitability.

Pros

• Penetration pricing is good for companies that are entering a saturated market, as it helps highlight the product and provides extra incentive for buyers to try it.
• Buyers who initially like your product might turn into long-term customers even with a higher price.
• You can also add limited-opt-in permanent incentives, such as lifetime access to the resource library, which encourages more buyers to try the product.

Cons

• If buyers use your products solely because of the reduced prices, they may balk when pricing returns to normal levels. While it’s a great strategy to generate initial traction, it’s not the best for building a steady client base.