Best Pricing Strategy for White-Label Mobile App Resellers


Snigdha
By Snigdha | June 25, 2021 5:15 pm  | 6-min read

Every business is different, with unique business models, strategies, monetization models, and hundreds of other elementary differences. However, when it comes to pricing strategy, most of them get stumped.

Mobile app resellers and developers are no exception to this dilemma. While some struggle with mobile app monetization strategies, others struggle with choosing the right pricing strategy for their white-label apps.

Before we move deeper into the topic of pricing, we first need to understand that, more often than not, the reseller program plays a significant role in the final pricing of your white-label app. Explore Appy Pie’s reseller program and discover how you can leverage it to make your app pricing strategy more robust.

Introduction

Pricing your products or services is a challenge on its own, and when it comes to a digital product like mobile applications, the challenge is bigger. The tech-savvy customers look at the reviews of all the products in your industry niche, make comparisons, and then finally make the purchase decision.

You cannot fool people into overpaying, and naturally, you can’t price your products too low.

Hence, it makes sense to study the competitors and your target market well to find the sweet spot that is perfect for you and your customers.

Every business is unique. You may choose to specialize in one particular niche of app reselling or decide to cater to a broad gamut of customers and sell different types of apps. In the blog ahead, we will discuss eight different pricing strategies, and you can choose the one that sounds perfect for you.

However, before we get into it, let’s first understand how business pricing works in general.

Business and pricing strategies

It is not you or a business that decides the pricing. It is the customers and the market. As a business owner or decision-maker, it is your responsibility to conduct a fair amount of research and find out how to price your white-label mobile app.

It is a global market, and you are serving the global customer. It means there is a fair chance that someone is already doing what you plan to do, with very similar offerings and services. Hence, it is inevitably the market that decides the price.

If you opt to price your mobile apps out of the normal market price range, you are going to push your business out of the market as well. Let’s face it. You’re not here to stand at the corners and watch the play.

Of course, there are some exceptions to this rule of business pricing. For example, if you already have an established brand name, you can get away with pricing your apps higher than the average.

Business level strategies

While defining your business-level strategy, two primary variables come into play – competitive advantage and competitive scope.

Competitive advantage involves a range of cost vs. uniqueness. To simplify, it means deciding whether you plan to sell your apps as the best or the cheapest – there is an established market for both scenarios.

Competitive scope, on the other hand, involves a range of narrow vs. broad target markets. For example – are you building an app for the masses or a super-specific niche market.

Based on the above criteria, we have five major business-level strategies. Let’s take a look!

  • Cost leadership
    • Salient points: low price, large target market, low differentiation
  • Differentiation
    • Salient points: higher price, large target market, high differentiation
  • Focused cost leadership
    • Salient points: low price, small target market, low differentiation
  • Focused differentiation
    • Salient points: high price, small target market, high differentiation
  • Integrated cost leadership
    • Salient points: varying degrees of price, market size, and level of differentiation

The fundamental idea here is to match your capabilities and potential to a consumer or market segment. So, first, do a deep customer analysis and understand them. Then, decide whether you want to serve up a specialized product with a high price or a broader market with a low cost, mass appeal.

Best pricing strategies for white-label app resellers

All the strategies that we have discussed this far sound pretty straightforward and simple in theory. However, in reality, any external factors like demand, cost, availability of resources, etc., may change at any time.

These strategies may not be enough to help you formulate the right strategy. Hence, businesses use multiple other methods of coming up with the right pricing for their products.

Following are the eight major forms of pricing strategy:

  1. Competition-based pricing
  2. Competition-based pricing is often also called competitive pricing or competitor-based pricing. This strategy focuses on the existing market rate instead of the cost of app development or the demand for the app you are selling.

    Here businesses use the competitors’ prices as a benchmark. This strategy is ideal for businesses entering a highly saturated space. Even a slight difference in the price may be the difference between success and failure for your app reseller business.

    Based on this strategy, you can price your app a little below, at the same price, or a little higher than your competitors. No matter what price level you choose, you stand a better chance of staying ahead of your competition while keeping your pricing dynamic with this price strategy.

  3. Value-based pricing
  4. In this pricing strategy, companies price their apps depending on the customer’s willingness to pay. The pricing is decided based on customer interest and data collected through surveys.

    When done right, value-based pricing can help boost customer loyalty in a big way. The strategy can even help you focus on your customers while strategizing for other departments like marketing, customer service, and more.

    The catch here is that you, as a business owner, will have to ensure that you closely monitor the different buyer personas and then decide the pricing for each of them accordingly.

  5. Penetration pricing
  6. In penetration pricing strategy, a business enters the market with an extremely low price, drawing the entire market away from competitors (particularly the high-priced ones). This strategy is not sustainable but is great for short-term projects.

    Penetration pricing strategy works best for new businesses looking for customers and entering a highly competitive space. The success of this strategy is based on the immense disruption it causes at launch.

    The strategy relies on the ability of the business to take the initial loss and hope that the customers will stick around when they gradually increase their prices.

  7. Cost-plus pricing
  8. Cost-plus pricing means deciding the price based on the cost of productions of the goods and services. The price is essentially decided by adding a mark-up amount (usually the profit you want to earn) to the cost price.

    This mark-up amount is typically a percentage of the production cost. This strategy works best in case of physical products and definitely not a good choice for service-based or digital products.

  9. Premium pricing
  10. Premium pricing strategy, also known as prestige or luxury pricing strategy, involves pricing your products higher than the market average with the intent to indicate that the product is a premium or high-value product.

    The underlying idea here is to focus on the perceived value and not other factors like the cost of production or even the product’s actual value.

    Fashion and technology-related products often use this strategy to market their products as luxurious or rare. Brand value is an important factor at play here – letting big, reputable brands price their products higher.

  11. Freemium pricing
  12. Freemium is a word coined by combining the words “Free” and “Premium”. In this strategy, companies offer a basic version of their product free of cost and let the customers upgrade if they want to access certain advanced features or content.

    Freemium pricing works great for digital products and SaaS companies as they can use this model to offer the customers a sneak peek into the software’s full functionality.

    The key to the success of this strategy is to keep the entry price barrier low and increase gradually as the customers opt for more features and content.

  13. Dynamic pricing
  14. Dynamic pricing, also referred to as surge pricing, on-demand pricing, or time-based pricing, is a flexible strategy where the pricing of the product varies according to the demands of the market and the customer.

    Several factors, including competitor pricing, market demands, etc., are factored into the algorithm that helps businesses like hotels, taxi services, etc., implement a dynamic pricing strategy.

  15. High-low pricing
  16. A high-low pricing strategy involves introducing your product at a high price and, later, lower the price when the novelty wears off.

    This strategy, also known as the discount pricing strategy, is used most effectively by retail stores that sell mostly season-based items, including fashion or clothing items, decor, and more.

Appy Pie’s App Reseller Program

Appy Pie lets you start your own app business without learning to code. There are several reasons why Appy Pie’s app reseller program is the best choice. Let’s take a look at some of the significant benefits:

  • White label CMS
  • White label marketing materials
  • Decide your own pricing
  • Start or boost your existing business
  • Access to all the live features
  • Dedicated technical support
  • App submission support
  • No ads
  • 30 mins training session

Conclusion

As a white-label app reseller, your pricing strategy depends on your choice of business-level strategy. If you want to charge a premium price for your apps, make sure that you offer enough value to your customers through your business and if you have an ordinary, average product, make sure that you price it competitively.

While deciding on the price, you must consider the resources and capabilities at your disposal, your consumers’ expectations, and more.

Let us know if there is a strategy I missed mentioning here. I’d love to hear from you!

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Snigdha
About The Author

The Content Head at Appy Pie, Snigdha has had a passion for writing since she can remember and feels lucky for making it her career. With a total experience of 12 years, she has dedicated the last 6 years to hard-core content writing and management. She actively writes about all things related to Social Media & more. In her spare time, she would either love to read curled up on the couch or take a bag of necessities (including a good book) and drive off into the sunset.

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