We have listened to many bearing distributors and found that trading with prices and strategies in the digital commerce space, also known as e-commerce, is often difficult.
This article is not a recommendation for which prices and strategies are the right ones in the digital space. Rather, we want to talk about how pricing strategies can change and what technologies should do to find the best path for your own business.
We at BEARING X know that traders from the roller bearing industry pursue many different pricing strategies. Backgrounds are, for example, that traders have concentrated on different groups and submarkets or also pursue different goals. The pricing strategy also depends on the competitive situation. Traders who offer rather rare bearings and focus on niche bearings tend to pursue a high price strategy. Other traders pursue the goal of increasing sales volumes and creating more rotation in the warehouse and therefore rely on low-price strategies. There are also roller bearing traders that pursue a differentiated pricing strategy, offering different prices for different product groups.
The past: traditional pricing
In the past, prices in B2B trading markets were often fixed and standardized. Companies used methods such as cost-plus pricing or competitor comparisons to determine their prices. The price was often determined only when a customer inquiry was received. This requires a lot of time and experience on the part of the salesperson. This method of pricing is familiar to many bearing distributors and is certainly still a good method in some areas today.
The present: dynamic pricing and transparency
Today, pricing in B2B retail markets is more dynamic. Through digitalization and the increasing availability of data and information, trading companies and their buyers and sellers have access to a variety of tools and technologies. This brings with it a certain degree of market transparency and enables prices to be calculated quickly and dynamically.
The future: Increased dynamics and transparency in prices
In the future, we will continue to see increasing dynamics of pricing in B2B trading markets - and increasing requirements for transparency. This development is based on various reasons, such as digitalization and the information available as a result. Globalization is also a contributing factor, in that rolling bearing distributors must also hold their own in international trade.
The dynamics of pricing are increasing, as companies will use more and more data and technologies to create personalized prices for their customers in digital online channels as well.
Thesis 1: Proven pricing strategies should also be played out in digital!
Although technology and digitalization are changing the B2B retail market and enabling new pricing strategies, it is still important to maintain proven strategies:
- Customer needs: Proven pricing strategies based on years of experience and knowledge of the market can still be effective in meeting customer needs and building customer loyalty.
- Brand perception: if a company is known for its quality products and services and has successfully pursued a premium pricing strategy in the past, it can continue to work.
- Business Relationships: Business relationships are an important aspect of B2B commerce. Proven pricing strategies can help strengthen these relationships. Companies that have long-standing customer relationships usually have long-standing pricing strategies associated with them. A sudden change in this strategy can jeopardize this business relationship.
New technologies, digitization, and the market transparency that also goes hand in hand with this do not mean that proven pricing strategies are no longer the right ones. On the contrary, technologies for digital commerce or e-commerce should enable roller bearing traders to continue to simply play out proven strategies.
Thesis 2: New pricing strategies can contribute to corporate success!
And thus improve competitiveness, customer loyalty and sales growth, and open up new markets. Trying out new pricing strategies in the B2B retail market can therefore contribute to corporate success:
- Competitiveness: The B2B industry is very competitive, and companies that do not pursue innovative pricing strategies can be left behind by the competition. Testing new pricing strategies can help companies become more competitive and stand out.
- Customer loyalty: New pricing strategies can also help to retain customers in the long term. By adopting new pricing strategies, companies can adapt their products and services to the changing needs of their customers and thus increase customer satisfaction. For example, one strategy would be to go after "best practice model" EBAY: Give your customers the opportunity to submit a binding price. You decide if it fits or not. Learn more on BearingX.io, how an implementation looks like.
- Sales growth: New pricing strategies can also help drive sales growth. By trying out new pricing strategies, companies can find out which strategies work best. One possibility would be to discount bearings that have been in the company's own warehouse for a long time and are blocking space for new ones at regular intervals and offer them for sale to unknown bearing distributors on a binding basis. This achieves a stock rotation, which in turn can increase sales growth.
- Market development: Playing off as yet unused pricing strategies can also help to open up new markets. Companies can reach new customer groups by adapting their prices and business models to the needs of these customers. For example, entering new digital markets with low prices can ensure that other market participants become aware of you and that a long business relationship can develop from this.
At a glance:
There will never be THE recipe for success for the best pricing strategy.
It is important not to rest exclusively on existing pricing strategies.
Because neither do the markets and their environment - be it through market transparency, digitalization or competitors.
Learn more about how BEARING X enables you to combine proven pricing strategies with new digital ways.
For your successful pricing in the digital age
