Have you ever analyzed the buyer psychology? What makes people buy? What evinces their interest to click on your ads, visit your Dropshipping store, add-to-cart and complete their purchase? This post covers a lot about human buying psychology. Check out the video here .
Demand and Supply in product selection
Why do you need to know the demand and supply elements in selecting products? When you advertise unique products, you are bound to attract buyers’ attention. However, if you tend to advertise on unique products, you are bound to see conversions. Common items such as toothpaste, frozen food and so on are available in the local stores and super markets. Buyers will be interested in purchasing a product when there is an element of scarcity.
John lives in a city and you are trying to sell a water bottle to him. Do you think it is worth promoting this product and advertise? It is common practice to sell water bottles at a fixed price in the city. They are also available at all super markets. Since the demand is less compared to supply, John will not have the inclination to click your ads or buy from your store. However, the same product will be a winner if the water bottle were to be sold in a desert or interior Africa where John gets lost, far away from the city.
What should be the optimum price of your product?
Majority of us are confused if we should price the product to X 1.5 x 2.5 X or 3x the cost on Aliexpress. The amount that people are going to pay for a product will be directly proportional to the value that they feel the product has or will have in their life.
Let us assume that you are promoting a problem-solving product in your Dropshipping store that provides the best solution to your visitors’ persisting problems. They wouldn’t mind even if you charge them three times, four times or even five times the cost in Aliexpress. Pricing is all about perceived value and the perceived value is built in people’s minds through comparisons. People are aware of the range of a price of a product even though they cannot recall the exact product price.
People are aware of a product called magnetic putty that sells between 10 and 15 dollars. If the product is priced at 13 dollars, the product sells well because it fits the range of the perceived value. If the product is sold at a higher price, the first time audience who are trying your product may not purchase.
2x – 3x Rule
Products are priced pretty cheap in AliExpress and people in the United States and other developed countries are willing to pay 2X to 3X the cost priced in AliExpress. You should neither overprice nor underprice the product but find the sweet spot or the optimum spot. This is possible only when you test out different price points. You can change the shipping price or the actual product price and see what converts the best. Once you know the sweet spot you can then focus on the buyer psychology’s underlying factors namely “want and need”.
The Consumer Behavior for need based products
Consumers’ buying decision is based on a step-by-step process. Let us explain with the help of a common example;
You have run out of groceries and you go to the grocery store to buy. Your buying decision will be based on the following steps:
- Realization– Realize that items are missing from home What is missing from my home
- Evaluation – Assess the need and come up with a list – What do I need for the next week and what meals can be had
- Comparison and find out the best deal – Am I getting the best price spending on fuel, time etc.
- Purchase – Finalize the buying decision from a location that fits my budget
- Need Products:
Need products are those that fulfil the basic needs of people such as food, shelter, clothing and so on.
- Want Products:
These are the products that we promote in Dropshipping stores.
People in tier 1 countries or developed countries such as America, Canada and the UK, have disposable income. They have enough income to fulfill their needs and leftover income to spend. They are more inclined and have more reason to buy want based products. When they come across these unique want based products in their Facebook feed they buy it impulsively and you get a customer. In developing countries like India, advertising may not get the customers you expect because of the low income levels.
Prime Emotions that drive purchases
We take actions based on our feelings. The above six emotions drive the purchase decisions.
Let us assume they see an amazing looking necklace have seen similar necklaces being worn by celebrities so they want this product because it’s a matter of pride for them. When you discover a product that drives any of these core human behaviors that drive purchases then you have got yourself a winner.
The Scarcity and Advantage Element
Why would they buy from your store instead of buying from Amazon or some other physical and digital store? If you position your product with a scarcity or mention the discounted percentage, it lures the human brain and convinces that they have made the best deal with this store in terms of price, discount, time and effort in making the purchase. You make them feel the advantage factor and in the process, you have closed the deal. That is the reason why people start trusting these low key stores that nobody’s ever heard of and these stores get so many sales.
The three things that you need to optimize to create an amazing experience for your business and for your consumer to visit your store, make a purchase, get the product and then feel happy are:
- Products and product research
- Product page (with image listing, copywriting)
- Ads and ad copy