Pricing Strategies For Decorative Lighting Products

In the world of interiors, decorative lighting products have the power to make or break a space by creating mood and contributing to the overall aesthetic. And of course, there are the practical qualities!

For lighting retailers, getting the pricing right for their products is crucial to continuing their trade. A good pricing strategy for decorative lighting products ensures long-term profitability, and the ability to outshine competitors and attract more customers.

In this blog, we explore some pricing strategies for lighting products as well as some key considerations for light retailers.

Understanding Your Market

Before considering a pricing strategy for lighting products, retailers should thoroughly understand their market. Who are your customers, and which other companies are competing for their business? You also need to thoroughly understand your product.

Premium lighting products that use higher quality materials, or lights that have more design features or are unique will have a different target market, and therefore pricing strategy, to more economical products.

Perhaps you want to target customers who are spending more money on individual items or those who prefer to buy less expensive lighting products. Either way, you must thoroughly understand your product, your market, and your competitors to help you make an informed decision about your pricing strategy.

Cost Based Pricing For Decorative Lighting

One of the simplest ways to price your lighting products is a cost-based strategy. Add a predetermined profit margin to whatever it costs you to purchase a product from your lighting wholesaler. Remember it isn’t just the cost of buying the product though – you also need to factor in your overhead costs and what it costs you to package and ship out products to your customers. This strategy needs reviewing regularly to account for price changes from your lighting supplier and other increases your business encounters to keep running.

Bundle Pricing Lights

Bundle pricing means offering lighting products as bundles or sets. This strategy means you get to upsell and increase the value of your customers' transactions. When you are sourcing stock, look for items that are part of a set, or would work well together. A good example would be to offer ceiling pendants that have matching table lamps. Your customer might initially only have been interested in the pendant light but if you have a bundle deal where they receive a discount for buying the pendant and the lamps, they could be tempted! You can also bundle up light bulbs with lights to increase the value of a transaction.

Value Based Pricing

Value based pricing requires you to have an extremely thorough understanding of your target market and what value they place on certain products. This will help you when it comes to expanding your product range and deciding what price to sell products at. Understanding your market will give you clear insight into what sort of lighting features your customers' value and would be willing to pay a premium for. For example, highly decorative or unique styling that feels a little bit more ‘one off’.

Psychological Pricing For Lights

A classic strategy is to price products that trigger customers' emotions and their perception that they are getting a good deal or saving money. A classic example is pricing something at £39 instead of £40 – £39 seems much cheaper yet the price difference is miniscule! You can also use pricing tiers to appeal to customer emotions. For example, by selling three variations of a product – basic, standard, and luxury. This provides customers with a choice, but many will opt for luxury because of the perceived value.

Promotional Lighting Pricing

Promotional pricing is a short-term strategy designed to appeal to a customer’s sense of urgency – they need to get this product now before it’s gone! Promotional pricing can be used in conjunction with lighting trends or seasonal holidays. Just make sure your promotions are in line with your brand image – some retailers use promotions or have sales frequently, whilst others may choose to limit promotions because when they do finally offer a sale, customers see it as a rarer opportunity. Neither strategy is wrong, it just depends on who you are selling to!

Dynamic Pricing Strategies

Dynamic pricing can work particularly well for online lighting retailers. Dynamic pricing means prices adjust in real time, according to demand, what your competitors are doing, and seasonal changes. Promotional offers can even be personalised to individual customers. When using this strategy it is important to ensure prices do not change too drastically though from one day to another so that it becomes noticeable.

Decorative Lighting Products From Searchlight

We hope you found this guide to pricing strategies for decorative lighting helpful. Remember, whatever pricing strategies you use, you must strike a balance between profitability, how your customers view you, and the dynamics of the lighting market.

If you are looking to access a wide range of high-quality decorative lighting to suit your customers' needs, you can’t go wrong with Searchlight Electric. With over 3000 lighting products and hundreds of new products added to our website each year, you have a  great selection to choose from.

We also pride ourselves on the value we offer our retail customers – why not take a look at our catalogue and see for yourself?

If you have any questions, please feel free to contact us and we will be happy to help.