Case 4: Pricing Strategies

Case 4: Pricing Strategies

One of my favorite companies, that I check several times a day, is steepandcheap.com. It is very similar to Woot.com except that it focuses on outdoor athletic apparel, such as climbing gear, snowboards, tents, and the like. Just like Woot.com, there is only one product offered at a time at a severely discounted rate, but unlike woot.com these products change every 20-45 minutes. Whenever I am in the market for something that I think will appear on steepandcheap.com I check the website at least 20 times a day.
. The company is an affiliate-based company that is entirely centered around its pricing strategy, even having cheap in its name. Affiliate marketing is where websites share traffic and revenue and the merchants selling their goods on the site pay commissions to the site. For example steepandcheap.com displays and sells a tent at a discounted rate for a company that has a surplus of tents. The company makes their profit and pays part of it to steepandcheap.com.
SteepandCheap.com has a very straightforward fixed pricing strategy. They primarily use a promotional strategy by offering a product at a very discounted rate for a limited time. There is always a limited number of the product so if it is a popular item or good deal you risk missing out on it if you don’t act fast, and there is a short time limit on the deal even if the item doesn’t sell out. This, along with the discounted price, forces people to hastily buy the product.
Generally the products are between 40-70% off retail price but that can very. As a rule of thumb, the larger the item the larger the discount on that item. Most inexpensive products will be about 30-50% off while more expensive ones will be on the higher side. Also the percent off is on the suggested retail price so in reality you are not saving as much as it says you are. You can find all of these items elsewhere way below suggested retail price but steepandcheap.com pretty much has the best prices around. As an example, earlier this week I bought a climbing harness from steepandcheap.com. It came out to around $38 with shipping and handling. It said that the regular price was around $100. I looked around online and I found the same harness on several different websites for as low as $53 with shipping and handling. While you are not saving as much as you would like to think, steepandcheap.com does have some of the best prices around.
One feature that makes it easy to assess the effectiveness of the steepandcheap.com is that it tells you how many of each item is being offered and how many have been sold. Some items are very popular and sell out quickly, but some will only sell 5 out of 45 being offered. Either way it is extremely successful. Even with the least sold items, which tend to be the bigger ones, there will be five or six sold in a half hour. At this point in time there are 5,462 people on the site, a microweight crew shirt being sold with six minutes left in the deal. So far 75 out of 115 of these shirts have been sold and the deal has only been on for 14 minutes. Overall I think steepandcheap.com has a very effective pricing strategy that will continue to be successful.