How to Raise Prices in an Online Store ?

Raising Prices Without Fear – How to Do It Smartly and Profitably

The topic of price increases comes up in every business sooner or later. Regardless of the industry, at some point owners and managers face the question: can we sell at higher prices? On the one hand, the costs of running a business keep rising – raw materials, transport, energy, labor. On the other, customers are becoming more conscious and price-sensitive.

There are no simple answers. Raising prices is about balancing competitiveness with profitability. However, experience shows that a well-executed price change not only improves margins but also stabilizes the business in the long run.

Why is raising prices often the best decision?

The greatest advantage of a price increase is its immediate effect. You don’t have to wait months for the results of a marketing campaign or operational savings. From the very first day of the new pricing, you start earning more on each product sold.

That’s why companies that regularly test price increases often gain a stronger competitive edge than those clinging tightly to an old price list.

In practice, fear of losing customers usually turns out to be exaggerated. Customers rarely abandon a purchase because of a 0.5% or 1% increase. Factors like product availability, service quality, reviews, or delivery speed are often more decisive.

Why shouldn’t you be afraid of raising prices?

1. It’s not irreversible. You can always go back to the old price – which makes testing safe.

2. Small steps minimize risk. Raising prices gradually (e.g., by 0.5–1%) helps identify the point where customers start reacting negatively.

3. Price is not always the main factor. In many markets, convenience, delivery speed, or brand loyalty play a bigger role.

Where do you need to be careful?

Of course, there are markets where price is the only factor. Online pharmacies and dietary supplements are good examples. In those cases, the difference between the cheapest offers can sometimes be less than 1%. This signals a price war, where customers simply choose the lowest price available.

In such environments, raising prices can quickly lead to a collapse in sales. That’s why the first step should always be analysis: are customers in my category truly price-driven, or are there other factors that matter?

How to choose the right products for price increases?

Not every product is suitable for a price increase.

Products you should avoid:

• items with no sales at all – raising their prices makes no sense,

• slow-moving products – higher prices may cause them to disappear completely,

• basket-opening products – items customers add first; raising their prices may discourage further transactions.

Best candidates for testing:

• products with high or medium sales,

• add-on products that don’t drive the whole purchase,

• items that customers are less likely to notice first.

In practice, basket analysis works very well – it shows which products are purchased together and what role they play in the buying process.

Strategies for Raising Prices

1. The “small steps” method

When competitor prices are unknown, the safest way is the small steps approach. Raise the price by a small percentage (0.5–1%), observe the changes, and then decide whether to continue.

Price testing often reveals that sales remain stable even with several percent increases, while profit grows. Step by step, you can find the optimal price point.

Important: tests should last long enough to cover natural variations in sales (e.g., weekends, seasonal peaks). For fast-moving products a few days might be enough, for slower ones it may take several weeks.

2. Raising prices based on competitors

If you have access to competitor pricing data, you can act more precisely and methodically. This strategy is about testing profit across consecutive price positions – step by step you raise the price, check if profit grows, and once it starts to decline, you roll back to the previous level.

How does the algorithm work step by step?

1. Establish a starting point – your current price and market position.

2. Raise the price slightly while keeping your current position (e.g., still being the second cheapest). This increases margin while minimizing the risk of losing customers.

3. Check the results – measure sales and margin over a sufficient period (days or weeks, depending on product turnover).

4. Move one step higher – adjust your price to take the next market position (e.g., from 2nd cheapest to 3rd).

5. Reassess profit and sales. If profit continues to grow or remains stable, keep the new price.

6. Repeat the process – test further positions (e.g., move from 3rd to 4th).

7. Stop when profit declines – if a price increase reduces profit (higher margin offset by lower sales), roll back to the previous level. That’s your optimal price point.

Practical example

Assume the product cost is 13 PLN, and competitor prices are:

• Store 1 – 14.90 PLN

• Store 2 – 14.99 PLN (your store)

• Store 3 – 16 PLN

• Store 4 – 16.59 PLN

Step 1. Starting at 14.99 PLN, you’re in 2nd place.Step 2. Raise to 15.99 PLN – you remain in 2nd place, but margin increases from 1.99 PLN to 2.99 PLN (a 50% jump).Step 3. Test sales results. If volume remains stable, keep the new price.Step 4. Move up to 3rd position – price at 16 PLN (or slightly below, e.g., 15.99–16.00 PLN).Step 5. Analyze profit: if sales hold and margin grows, stick with it.Step 6. Test the 4th position (~16.50 PLN).Step 7. If profit decreases, go back to the previous level – that’s your optimal price.

Why do companies avoid raising prices?

The biggest obstacle is fear – of losing customers, of negative feedback, of falling sales. Ironically, it’s this fear that keeps many companies from capturing extra profit that’s right within reach.

In reality, customers rarely leave permanently after a failed price increase. Once you restore the old price, most of them come back.

How to deal with sales fluctuations?

During price tests, sales fluctuations are natural. That’s why you shouldn’t draw conclusions from just a few days of data.

Smart steps include:

• extending the test period to 2–3 weeks,

• analyzing results with moving averages to smooth out short-term spikes,

• comparing results with the same period last year to account for seasonality.

Conclusion

Raising prices doesn’t have to mean risk. On the contrary – it’s one of the simplest and fastest ways to improve profitability. The keys are:

• selecting the right products,

• testing with small steps,

• leveraging competitor data,

• analyzing results patiently.

Companies that learn to manage pricing as consciously as marketing or logistics gain an advantage that’s hard to copy. While others chase customers with discounts, they build strong profitability and long-term growth.