How to localize your prices

Last Updated Mar 12, 2021
Emma Jagger

Engineer, maker, Google alumna, CMU grad

There are several reasons you want to display different prices based on the geographical location of your website visitors.

If, for example, you sell throughout the eurozone, which is made up of different countries with different tax rates, you might want to adjust prices according to the country in which the visitor is located. The VAT in France is 20%, 25% in Sweden, and 17% in Luxembourg, to take a few. To better manage your margins, you should adjust your selling price depending on the VAT.

Another strategy is to modify your prices according to the buying power, which differs from country to country.

If you sell a physical product, you would have to take into account transportation costs. Your buyers located in the same state as your warehouse may benefit from lower and more attractive prices. Whereas sending your products across the country will represent a cost in delivery that you may want to reflect in your selling price.

Depending on the local competition, you might also want to offer lower prices to better position yourself on the market.

How to set up a price localization based on IP addresses on my website?

It all depends on your pricing policy. If, for example, you apply a multiplicator based on your visitor's location, then there is no database structure or modification needed. To illustrate this, and regardless of your product prices, if you decide that Californians should get a 10% discount on any of your products, then it can be applied to any product price on the fly.

If, on the other hand, you have a more precise pricing policy, and each product has a well-defined price depending on the location of the sale, then you will need to create a specific structure in your database to record each of those prices.

The next technical consideration consists of determining the countries in which your visitors are located. In case your visitors are already logged in to your website, you might already know their delivery address, and you can use this information to determine the price displayed.

For users who are not logged in, however, you will need to determine their login location. And to do this, you will need to use geolocation.

How to geolocate a website visitor who is not logged in?

IP Geolocalization is the process of translating your visitor's IP address into a physical location. The best and cheapest way to do so is to use a robust and real-time third-party service. The Abstract API can determine instantly and with an excellent level of precision in which countries your visitors are located. The abstract API adapts itself to your infrastructure, so that you can call the API from both the server-side and the client-side.

What are the risks associated with IP geolocation and VPNs?

A popular solution, VPNs, allows users to access the Internet as if they were in a completely different geographical location.

If you set up a pricing policy based on geographical location, you should consider that some users will bypass your system to benefit from a more attractive price.

Ultimately, you will know the shipping and billing address at the time of the order and could adjust the price accordingly. But this would make the price change in the last step of the sales funnel and may surprise your client, who could decide not to go through with the sale. It's therefore essential to determine earlier if your visitors are using a VPN.

The same Abstract API you are using to geolocalize your visitor can detect if your visitor's IP address is the one of a VPN, making it your perfect solution for IP analysis in the context of price localization.

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