Product mix pricing strategies help you balance competitiveness, profitability, and brand perception across your catalog. Learn more in this guide.
the author
Angela Sokolovska
Ecommerce expert
share this post
Pricing is one of the most powerful levers in ecommerce. While many merchants focus on optimizing the price of a single product, success often depends on how you price your entire product mix. Product mix pricing strategies help you balance competitiveness, profitability, and brand perception across your catalog.
Get it right, and you can maximize revenue while appealing to different customer segments without diluting your brand or…
…get it wrong, and you risk cannibalization, customer confusion, or leaving profit on the table.
This article explores the main product mix pricing strategies, how to apply them in ecommerce, and how to test and optimize them with real-world data.
When managing a diverse catalog, merchants need to ensure each product is priced in a way that supports both individual sales and overall portfolio performance. Below are the primary product mix pricing strategies used in ecommerce, along with practical applications for online stores.
1. Product Line Pricing
This strategy involves offering different versions of a product at varying price points. The goal is to appeal to different customer segments while maintaining clear differentiation between options.
Example: A skincare brand offering a basic moisturizer at $25, a mid-tier product with added benefits at $45, and a premium formula at $70.
Application in ecommerce: Clearly display product comparison charts on collection or product detail pages to highlight differences in benefits, ingredients, or features. This helps justify higher price tiers and encourages upsells.
2. Optional Product Pricing
Optional product pricing refers to add-ons or upgrades that can be purchased alongside a core product. These enhance the shopping experience and increase average order value (AOV).
Example: A laptop retailer offering sleeves, extended warranties, or premium packaging as optional add-ons.
Application in ecommerce: Place optional upgrades at checkout or use “Frequently Bought Together” sections on product pages. This creates visibility without overwhelming the shopper during the browsing stage.
3. Captive Product Pricing
With captive product pricing, the core product is often sold at an attractive entry price, while the required accessories or refills carry higher margins. This model drives long-term profitability.
Example: Keurig machines are competitively priced, but recurring revenue comes from coffee pods.
Application in ecommerce: Highlight subscription options for captive products (like refills or consumables). This creates predictable recurring revenue while reducing friction for the customer.
4. By-Product Pricing
By-product pricing involves selling secondary products or production waste to recover costs. While less common in ecommerce than in traditional manufacturing, creative merchants use it to expand their catalog.
Example: An apparel company repurposing fabric scraps into small accessories, or a coffee brand selling used grounds for gardening.
Application in ecommerce: Market by-products as eco-friendly or sustainable offerings to appeal to environmentally conscious shoppers.
5. Promotional Pricing Across Product Lines
Promotional pricing incentivizes sales across a product portfolio by bundling, discounting, or pairing new items with best-sellers.
Example: A protein bar brand offering a discount on a new flavor when purchased with an existing top-selling variety.
Application in ecommerce: Run time-limited bundle promotions with clear urgency indicators. Test whether discounts across related products drive incremental sales or simply shift purchases from one SKU to another.
Pro tip: Merchants often succeed by blending these strategies rather than applying them in isolation. For example, a store might use product line pricing to anchor its premium items, combine it with optional product pricing to boost AOV, and layer in promotional pricing during seasonal campaigns.
Analyzing Competitors Across Your Product Mix
No product mix pricing strategy exists in isolation. Your catalog must be competitive not only at the individual SKU level but also across categories and bundles. Customers compare prices instantly, so understanding where you sit relative to competitors is critical for maintaining both profitability and brand integrity.
How Competitors Influence Your Pricing Decisions
Direct competition at the SKU level: If your mid-tier product is priced significantly higher than a competitor’s comparable option without a clear value differentiator, conversions will suffer.
Portfolio comparisons: Shoppers do not just compare one product to another. They evaluate how your entire catalog stacks up. For example, if a competitor’s starter kit is priced at $49 and yours starts at $79 without added benefits, customers may perceive your whole brand as overpriced.
Psychological thresholds: Competitors often set “price ceilings” for categories. For instance, if no similar product in your category exceeds $99, moving beyond that threshold requires strong storytelling and brand credibility.
Tools for Multi-Product Price Monitoring
Competitor scraping and tracking software: Platforms like Prisync or Price2Spy can monitor competitor product catalogs in real time.
Marketplace benchmarking: If you sell on Amazon or other marketplaces, use automated repricing tools to stay competitive while protecting margins.
Ecommerce analytics dashboards: Many merchants create internal dashboards that combine sales, conversion rates, and competitor pricing data for faster decision-making.
Actionable Steps for Merchants
Map your portfolio against competitors: Create a visual pricing matrix showing how your products align against similar competitor offerings by tier. This helps identify gaps and overlaps.
Differentiate beyond price: If you cannot compete on cost, emphasize value through faster shipping, stronger guarantees, or sustainability. Customers often pay more when they perceive added benefits.
Reassess quarterly: Competitors adjust constantly. A static approach leaves you vulnerable to undercutting or premium positioning loss.
Example: A protein bar brand offering a discount on a new flavor when purchased with an existing top-selling variety.
Application in ecommerce: Run time-limited bundle promotions with clear urgency indicators. Test whether discounts across related products drive incremental sales or simply shift purchases from one SKU to another.
Pro tip: Merchants often succeed by blending these strategies rather than applying them in isolation. For example, a store might use product line pricing to anchor its premium items, combine it with optional product pricing to boost AOV, and layer in promotional pricing during seasonal campaigns.
Pricing for Brand Consistency and Customer Segmentation
A well-structured product mix pricing strategy does more than maximize revenue. It also protects brand perception and ensures that different customer segments feel appropriately served. In ecommerce, where shoppers compare prices instantly and brand reputation spreads quickly, consistency is essential.
Maintaining Premium Positioning
If your brand offers premium products, their price should always reflect that status. Deep discounting or inconsistent pricing undermines the perception of exclusivity and quality.
Example: A luxury fashion label may offer accessories at more accessible prices but rarely discounts its flagship handbag line. This maintains the halo effect of the premium product while still allowing entry-level customers to participate in the brand experience.
Ecommerce application: Use price anchoring to reinforce premium positioning. Place high-end items prominently in your catalog to make mid-tier items feel like strong value propositions without lowering their price.
Serving Multiple Customer Segments
Most ecommerce stores cater to more than one type of buyer. Some are price-sensitive first-time shoppers, while others are loyal customers willing to pay more for added value.
Tiered catalog structure: Offer clear entry-level, mid-tier, and premium versions across categories. This provides a pathway for shoppers to “trade up” as they gain loyalty and trust.
Segmented promotions: Provide exclusive bundles or discounts to high-value repeat customers without cheapening the perception of premium products for new visitors.
Localized pricing: If you operate internationally, adjust pricing to reflect regional purchasing power without altering brand hierarchy.
Avoiding Mixed Signals
Inconsistent pricing can confuse customers and damage trust. For example, if a premium product is frequently discounted, it no longer feels premium. Similarly, if budget products are priced too closely to mid-tier offerings, customers may feel manipulated.
Guideline: Keep your price architecture clean and predictable. Customers should easily understand why one product costs more than another.
Actionable step: Audit your catalog quarterly to confirm that pricing tiers remain clear and aligned with both brand identity and customer expectations.
Pro tip: Strong segmentation is not just about price differences. It is about aligning each tier with messaging, design, and positioning. If a premium product uses clean, minimal design with round numbers ($300), its accessories should follow the same aesthetic instead of using bargain-style pricing ($19.99). Consistency reinforces trust and elevates the entire portfolio.
Ready to optimize your entire storefront?
Take the guesswork out of optimizing your storefront using Shogun A/B Testing for Shopify.
Even the most carefully designed product mix pricing strategy is ultimately a hypothesis. To know whether your approach is truly working, you need to validate it with real customer behavior. Testing ensures you strike the right balance between competitiveness, profitability, and brand integrity.
Using A/B Testing to Identify the Best-Performing Price Combinations
The most effective way to validate pricing strategies online is through A/B testing. By creating two versions of the same product page with different pricing structures, you can compare performance across metrics such as conversion rate, revenue per visitor, and average order value.
Shogun A/B Testing: With Shogun, merchants can easily set up controlled experiments directly on their ecommerce storefront. You can test different product line price points, bundle pricing, or free shipping thresholds to determine which mix drives the strongest overall revenue [Price testing feature coming soon].
Example: A lifestyle brand tested a $49 bundle versus a $55 bundle with added accessories. Conversions dipped slightly at $55, but total revenue per visitor increased by 10% thanks to higher margins.
Avoiding Cannibalization Between Products
One of the biggest risks in product mix pricing is cannibalization, where sales of one SKU eat into another rather than driving incremental growth.
If your mid-tier product is priced too close to your premium version, shoppers may “trade down,” lowering overall profitability.
Conversely, if budget products feel too stripped down, customers may avoid them entirely, leaving entry-level buyers untapped.
Solution: Use Shogun A/B Testing to trial different price gaps between tiers. By measuring customer behavior in real time, you can identify the optimal spread that preserves each product’s role in your portfolio.
Testing Bundles and Promotions
Bundles are a common product mix strategy, but not all bundles deliver incremental revenue. Testing ensures you are not simply shifting purchases from single products into discounted packages.
Test different bundle compositions: For example, bundle a best-seller with a new product versus two best-sellers together.
Leverage urgency: Limited-time bundles can drive trial without permanently anchoring products at a lower price point.
Key Metrics to Track During Testing
Conversion rate: How many visitors complete purchases under each test condition.
Revenue per visitor (RPV): Balances conversion rate and AOV, revealing which mix actually drives growth.
Customer acquisition cost (CAC): A lower price may boost sales, but if CAC does not improve, profitability suffers.
Repeat purchase rate: Are discounted bundle buyers becoming loyal customers, or only purchasing once?
Real Ecommerce Examples of Product Mix Pricing
1. Apple’s Tiered Product Line Pricing
Apple consistently applies product line pricing to appeal to multiple customer segments while reinforcing its premium brand. Within its current iPhone lineup, for example:
Entry tier: iPhone 16
Mid-tier: iPhone 16 Pro
Premium tier: iPhone 16 Pro Max
Each tier is priced to reflect meaningful differences in features such as camera systems, display quality, materials, and performance. The Pro Max model anchors the lineup at the top end, which makes the standard iPhone 15 feel like a strong value for cost-conscious buyers, while still keeping the Pro options aspirational. This clear tiering prevents cannibalization and ensures every customer segment has a place in the ecosystem.
2. Dollar Shave Club’s Captive Product Strategy
Dollar Shave Club is a prime example of captive product pricing in the ecommerce space.
The razor handle is sold affordably, often as part of a low-cost starter kit to attract new customers.
The real profitability comes from recurring consumables such as razor cartridges, shaving cream, and grooming products.
By building a subscription model around these consumables, Dollar Shave Club ensures recurring revenue and strengthens customer lifetime value.
This model locks customers into the ecosystem, reduces churn through convenience, and turns consumables into a reliable revenue engine – a strategy many ecommerce merchants can adapt with their own refillable or repeat-purchase products.
3. Allbirds’ Tiered Product Expansion
Allbirds, the sustainable footwear brand, showcases how product mix pricing can strengthen both margins and brand perception.
Allbirds started with a single hero product – the Wool Runner – at a mid-tier price point that positioned the brand as accessible but premium.
Over time, they expanded into higher-priced tiers such as performance running shoes and weatherproof lines, which anchor the catalog and justify the brand’s premium identity.
Seasonal limited releases and collaborations act as “exclusive tiers,” creating urgency and reinforcing the brand’s eco-conscious luxury perception.
This mix allows Allbirds to appeal to first-time buyers who want to try the brand, while still offering premium options that increase average order value and reinforce loyalty.
4. Williams-Sonoma and the Power of Premium Anchoring
Williams-Sonoma famously boosted bread maker sales by introducing a premium version at a much higher price point ($429). Even though the premium model did not become a top seller, its presence shifted customer perception, making the original model appear like a better deal.
This is a classic good–better–best pricing application. By adding a high-priced option to the product mix, the retailer anchored expectations and elevated the perceived value of its mid-tier products. Many ecommerce merchants now use this approach, introducing premium bundles or variants not just to sell more of them but to drive sales of core products.
Key Takeaways for Merchants
Product mix pricing strategies are not about individual SKUs alone – they are about how your entire catalog works together to drive revenue, reinforce brand identity, and serve different customer segments. Merchants that treat pricing as a portfolio-wide discipline, rather than a product-by-product decision, gain both flexibility and resilience.
What to Remember:
Think in systems, not silos: The way one product is priced affects how customers perceive others in your catalog. Always evaluate pricing in context, not isolation.
Leverage tiering to guide behavior: A “good–better–best” structure or premium anchors can shift perception and nudge customers toward profitable options.
Use captive and optional products wisely: Accessories, add-ons, and consumables can turn a one-time sale into a recurring revenue stream if priced strategically.
Validate with testing: Pricing strategies should be data-driven, not guesswork. Tools like Shogun A/B Testing allow merchants to run controlled experiments and optimize real-world results.
Stay consistent with brand positioning: Every price point, from entry-level to premium, should align with the story you’re telling about your brand.
Continuously monitor and adjust: Competitors, customer expectations, and market conditions shift quickly. Revisit your product mix pricing strategy regularly to ensure it’s still delivering the right outcomes.
Ready to optimize your entire storefront?
Take the guesswork out of optimizing your storefront using Shogun A/B Testing for Shopify.
