While selling on a rental marketplace, entrepreneurs’ goal is to generate many sales as possible, make a profit, get positive customer feedback. This success depends only on the pricing strategy.
Why rental marketplace pricing strategy is important?
- Pricing is a key driver in the decision-making process for a rental marketplace.
- It helps to know what your target market will pay for your product.
Hence marketplace pricing strategy is important for your business but choosing the right pricing strategy is a challenge for all rental marketplace owners. It is also difficult to succeed without having a thorough knowledge of pricing strategies for your marketplace.
Let me share a few different marketplace pricing strategies here,
- Competition based pricing
- Penetration pricing
- Subscription pricing
Start knowing it!
Choosing the best rental marketplace pricing strategies
1. Competition based pricing
Sometimes in order to stand out from the competition, you need to chase your competitors. In a rental business, keeping track of the prices charging from your competitors is very important.
Hence monitoring your competitor’s pricing range and set according to their price is known as competitors based pricing. It is also known as strategic pricing.
Need for competitor based pricing
- It let the business to control the competition in preventing losing market share and customers to the competitors.
- Paving the path for profit maximization.
- Keeps your customer stable.
2. Penetration pricing
It is a needed pricing strategy that is useful in gaining market share quickly in setting an initially low price to entice customers for your marketplace. An extreme form of penetration pricing is also known as predatory pricing.
Rationale behind the penetration pricing,
The overarching goal of penetration pricing in the rental marketplace is to,
- Capture market share
- Creates brand awareness and loyalty
- Switching customers from competitors
- To beat competitors in the market
3. Subscription pricing
The subscription pricing model is where either some of the marketplaces are charging their users a recurring fee to access the marketplace. It is one of the best strategies for recurring steady revenue.
General Strategies for a subscription model,
- Offering multiple pricing tiers like starter package, intermediate package, and pro package.
- providing a basic free version for the intro package.
- Offering incentives or cashback for upgrading.
In Subscription pricing model you can use both the below pricing,
In any freemium services, the marketplace offers for free and charges the user for upgrades. There are two ways to implement the freemium services, either giving free of charge and charge extra for upgrades or giving free as well as paid services.
The free products users have certain access to a few features that unlocked when the users buy the paid services.
Premium pricing is one of the pricing strategies to set higher prices for certain products. So that the customers will purchase it due to the perception that it might have unusually high quality.
Advantages of premium pricing include producing higher profits, creating tough barriers to entry for competitors and increasing the brand value of your product.
Why choose subscription pricing?
The revenue stream from recurring subscription is greater than revenue from one-off purchases.
Customers often find subscription pricing a convenient, time and money-saving. As subscription pricing is paid for over a period of time it can make a marketplace more affordable.
Want to get started building a profitable rental marketplace today?
Hopefully, this post helps you in getting detail knowledge of the different strategies of pricing for your rental business. If you want to successfully lure customers and deciding to implement these strategies in your rental marketplace, then start your rental marketplace journey with RentALL which helps you in running your own profitable rental marketplace platform.