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5 Examples of Channel Pricing

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Channel pricing is the use of distribution channels as a factor in pricing. It is common for firms to offer different prices depending where you buy an item. The following are common types of channel pricing.

Price Discrimination

Channels are a good way to differentiate between customers who are willing to pay more for your products and those who are price-sensitive. For example, a fashion shop on a posh shopping street is likely to attract customers who are willing to pay more than online shoppers.

Clearance Channels

Using dedicated channels to clear excess inventory such as unpopular colors. Brands may take significant steps to keep clearance inventory out of sight of their regular customers. For example, firms may open outlet shops in remote suburban or rural locations.


Using pricing to recoup the costs of expensive channels. For example, a grocery store chain may operate both discount locations and full service locations that charge higher prices but offer conveniences such as wide isles and more checkout counters.

Penetration Pricing

Charging less when you open a new channel in order to gain market share. For example, using low prices to attract customers to your ecommerce presence to gain market share online.

Unified Pricing

It is common for firms to make significant efforts to unify prices across channels for a region. Consistent and stable prices may be considered an important element of brand identity and customer experience. This may also be done to maintain good relationships with channel partners such as distributors, retailers, dealers, and sales representatives who are impacted if you cut prices on a channel such as ecommerce.
Overview: Channel Pricing
The use of distribution channels as a factor in pricing.
Related Concepts


This is the complete list of articles we have written about pricing.
Algorithmic Pricing
Bargaining Power
Benchmark Price
Price Fixing
Cost-plus Pricing
Price Gouging
Customary Pricing
Decoy Effect
Everyday Low Price
Marginal Utility
Willingness To Pay
Dynamic Pricing
High-Low Pricing
Market Value
Flat Pricing
Loss Leader
Predatory Pricing
Price Discrimination
Snob Effect
Market Price
Price Competition
Price Leadership
Premium Pricing
Price Economics
Price War
Revenue Management
Veblen Goods
Price Floor
Price Promotion
Price Sensitivity
Price Skimming
Price Umbrella
Pricing Power
Pricing Strategy
Sticky Prices
Value For Money
More ...
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