Any online marketplace is successful if it maintains an upward trajectory growth, by generating suitable revenues and gaining profits. The growth is important for the long term survival of the sharing economy business. There are different revenue streams a marketplace can stick to but it all comes down to pricing smartly of your service to gain profit.
There are various effective pricing strategies one can avail by the Host/Providers to generate revenue. One such strategy is seasonal pricing, changing the pricing of the rental service depending upon various factors.
About Seasonal Pricing
It means setting different prices for a product or a service depending upon high-season and low-season. This supports in keeping up the charm of the marketplace revenue when it is off-season and builds the capital.
How does it help in terms of revenue?
Here is the list of ways it helps you generating revenue.
Increases the booking
During the off-season, it is a known fact that booking happens at a low rate. At this time, cutting the price would increase the booking stabilizing the marketplace revenue.
Similarly, car rental companies thrive mostly on holidays and season times. Other times, the business runs low and but still be in operation. The survival measure is usually done by cutting the prices to get the attention of office-goers and someone travelling out of town.
Maximise the profits
Profits define the success of the marketplace. During high-season you can earn better by keeping an appropriate price with respect to the demand to earn considerable profit compensating from the low-season as well.
During summer or spring, kids are on holidays and people usually plan a trip to a sight-seeing location. Some people keep weddings and other special events. This will be the time the demand raise for hiring cars and vacation home. Owners grab this opportunity to price higher, thus gaining profit.
Boosts the offers
Huge demands can make more profits if strategically priced by introducing offers and discount. Offering discount pricing of your rental service to a specific segment of people earns a loyal audience and increases the gross margin. For instance like offering a discount to membership customers or imposing introductory price to the people who first sign in to your platform.
Stabilizes supply and demand
Sometimes a marketplace wouldn’t have enough supply on hand to accept the request of the customer. At these times, the pricing is done high accordingly to attract a specific segment of customers who are just enough to run the marketplace.
Vacation homes and sharing space rooms can consider this method when the demand goes high. Keeping a high price would be affordable for a few people thus reducing the demand from customers.
Keeps up with the market and competition
Based on the current market conditions and competitors pricing, implement your pricing strategy to stay ahead of the game. Consumers compare the pricing of other marketplaces before making the final call. Make a decision which always makes to stay at the top of the game, which increases the marketplace brand value, customer base and builds trust among customers, thus keeping the revenue stable.
Keep in mind the operation cost, insurance, taxes, and profit prediction before setting the price to give a tough competition. But keep in mind, changing prices too often also affects the brand image as well.
RentALL implements Seasonal pricing
RentALL implements seasonal pricing option for the Host/Providers to adjust the pricing of their service in marketplace for sailing through high and low demands.
Hiked/Reduced prices can be set by selecting the days in the Calendar option.
Here’s the upshot
Seasonal pricing strategy can benefit the Providers/Host if being well aware of their own service value and competitors advantage over them. Success of any marketplace depends upon the revenue generation and implementing a sound plan to make it work. Marketplace owners can enjoy the colossal benefits of having more customers in their marketplace by implementing seasonal pricing.
Thank you for your time reading this post. If you have any other questions on the seasonal pricing strategy, feel free to get in touch with us at firstname.lastname@example.org