Ecommerce Pricing Strategy for Google Shopping Ads

Your price against the market matters on Google Shopping, but mostly when it is well above the market. In our study of 1.4 million products, 11.7% of products priced more than 20% above the market converted at least once, against 20.4% at the market price and barely more below it. Shipping terms and discounts change what a shopper pays and sees, and both cost margin. Pull the levers in this order: accurate price data, products far above the market, shipping, and discounts last.

What does a pricing strategy change on Google Shopping?

On your own site, a price is a number on a product page. On Google Shopping, it becomes part of the ad. Your price reaches Google through the product data in your Merchant Center account.

According to Merchant Center Help (Price [price]), Google shows the price you submit to users. It must match the price on your landing page and at checkout. If it doesn’t, Google disapproves the product.

Every pricing decision reaches the ad through your product feed. Google then does something your own site never does: it compares your price with what other retailers charge for the same product.

Price is also only one half of the economics. It sets your margin, and the margin sets how much advertising a sale can carry. Our guide to ecommerce unit economics walks through the full calculation, from margin to the break-even ROAS your ads have to beat. This guide covers the price side: where you stand against the market, Google’s suggested prices, discounts, order value and shipping.

The classic pricing strategies all still apply. Each one turns into something specific inside Google’s systems.

One rule holds across all six. The ad shows your price, but the margin behind it stays with you: unless you send your cost of goods, Google usually sees revenue, not profit.

How does Google compare your price with the market?

In Merchant Center, you find the Pricing tab under Analytics, then Products. According to Merchant Center Help (About Pricing in Merchant Center Analytics), it shows two things: how your prices compare with a benchmark, and suggested prices. This comparison is what Google calls price competitiveness.

Three definitions from that page matter most:

• Benchmark price. The average price that typically leads to more successful ad auctions, impressions, clicks or conversions, depending on the data available. It draws on all retailers that sell the same GTIN in Shopping ads and organic listings.
• Price gap. The percentage difference between your price and the benchmark price.
• GTIN requirement. You only get benchmark data for products with a valid GTIN, the manufacturer’s barcode number.

The Merchant API reference (PriceCompetitivenessProductView) adds one detail: each benchmark is tied to one country. If you sell in several countries, read each market on its own.

Google’s own summary on the Pricing page is short: “Price plays an important role in optimizing product performance.” It doesn’t say how much price weighs against everything else in the ad. Our guide to the price competitiveness report shows how to read it without being misled, including products the benchmark has matched wrongly.

Above the market, fewer products sell; below it, little changes

In our study of 1.4 million products, we matched Merchant Center price competitiveness data with ad results over 13 months. The match covered 213,913 products across 51 ad accounts.

Four things stand out:

1. Being above the market goes with fewer products selling. The share of products that converted falls from 20.4% at the market to 14.7% at 5–20% above, and to 11.7% at more than 20% above.
2. Being below the market adds almost nothing. 21.5% of cheaper products converted, and 20.8% of much cheaper ones, against 20.4% at the market.
3. Price explains little on its own. The correlation between price gap and product status, the performance group the study put each product in, was r = −0.075, close to zero. Among the best-performing products, 38% were cheaper than the market and 37.4% were at the market price.
4. The cheapest group had the lowest average ROAS of the five, 552%. Products priced at the market had 855%.

This is an observation, not an experiment. The study counts ROAS on revenue because it has no cost of goods, so the ROAS column shows revenue per unit of ad spend, not profit. Our article on whether cheaper prices win on Shopping has the full breakdown.

The practical takeaway is narrow. Look at the products far above the market first. Don’t cut prices across the catalogue to beat the benchmark: below the market, the share of products that sold barely moved.

Should you follow Google’s suggested price?

Treat it as a prompt to check, not a price to copy. First confirm what Google compared your product with, then lower the price in small steps while you watch the margin.

Merchant Center’s Pricing tab suggests a sale price for some products. According to Merchant Center Help (About Pricing in Merchant Center Analytics), Google builds these suggestions from simulations at different price points over the past 7 days. It factors in price sensitivity (how demand reacts to a price change), current performance and how price changes worked for businesses similar to yours.

The conditions and limits, from the same page:

• You must report purchase conversions to get suggestions at all.
• Conversions with cart data, cost of goods and a minimum price can improve the suggestions. A GTIN helps but isn’t required.
• Google shows a suggestion only where it predicts a significant improvement, and says predictions don’t guarantee results.

The Merchant API reference (PriceInsightsProductView) lists what each suggestion carries. You get the suggested price, the predicted change in impressions, clicks and conversions, and a rough grade of how effective the change is likely to be. None of these fields shows your profit.

That is the gap to keep in mind. Without your cost of goods, the suggestion rests on clicks, conversions and price sensitivity, not on your own margin. A suggestion that sells more units can still earn you less. Our guide to Google’s suggested price covers when to accept it and when to ignore it.

Our own approach is gradual. Google may have compared your product with a different size or configuration, so the portal asks you to check the match first. Then lower the price step by step: by about 5% once every two or three weeks, not all at once.

Gradual steps add up. With the market price at 100, a product at 120 reaches 114 after one 5% cut, 108.30 after two and 102.89 after three.

Each step costs margin. At a 35% margin, a 5% cut takes about 14% of the gross profit per unit. To keep the same gross profit, that product needs about 17% more orders. Our guide to changing prices in Shopping ads shows how to run such a test without breaking your campaigns.

If you’d rather let Google set sale prices continuously, that is what automated discounts do. According to Merchant Center Help (Set up automated discounts), Google changes the sale price between your regular price and a minimum price you set. The feature requires conversions with cart data and cost of goods.

What do discounts change in a Shopping ad?

A discount reaches Google as a sale price. According to Merchant Center Help (Sale price [sale_price]), the requirements, plus one best practice, are:

1. Keep sending the regular price in price and add the discounted price in sale_price. It must be lower than the regular price.
2. Show both prices on the landing page, and only the sale price at checkout.
3. As a best practice, add sale_price_effective_date for the sale period. Without it, the sale price applies at once.

The strikethrough is a separate question. Merchant Center Help (About sale price annotations) lists when Shopping ads can show the old price struck through, with a sale badge. The discount must be more than 5% and less than 90%. In most listed countries, the regular price must also have been valid for 30 days within the past 200.

For Shopping ads, the page lists the US and 12 other countries and leaves out the Czech Republic, Slovakia, Poland and Ukraine. Even when you meet every condition, Google says the strikethrough isn’t guaranteed.

The same logic applies to merchant listing structured data, the markup on your product pages that describes the offer to Google. According to Google Search Central (How To Add Merchant Listing Structured Data), you mark the regular price as a strikethrough price, and the active price then counts as a sale price. Our guide to sale price in Google Shopping has the setup details.

Promotions are a different tool: a discount applied at checkout through a code or a promotional campaign, which can cover many products. Google’s overview (Understanding product pricing) says availability varies by country. If your market isn’t covered, see the alternatives to Merchant Center promotions for Czech, Slovak and Ukrainian stores.

What a discount costs

You pay for every discount from your margin, on every order, including orders that would have come at the full price. The arithmetic is simple. To keep the same gross profit, orders must grow by the discount divided by what is left of your margin after the discount. This assumes your cost of goods stays the same.

ROAS can hide this. If a discount lifts conversions enough, ROAS rises while gross profit can still fall. A product on a deep discount can top your ROAS report and earn you nothing.

Our guide to how deep you can discount shows how that happens. The metric that catches it is profit on ad spend (POAS), which needs your cost of goods.

Selling below cost to clear old stock is a separate goal with separate rules. For that case, see our guide to clearance pricing.

How does order value change what Shopping ads can afford?

Average order value sets how much revenue each sale brings in to pay for the clicks that led to it. The catch shows up in our study of 1.4 million products: stores with higher order values tended to spend more of their budget on products with no sales.

Here is the study broken down by order value, for 128 stores:

The share of budget on products with no sales grows from 32.6% in the low segment to 53.4% in the high one. The share of products with sales falls from 32.2% in the low segment to 13.7% in the premium one. The study explains it this way: shoppers take longer to decide on expensive products, so the budget has time to spread across more products with no sales. The premium segment has only 7 stores, so its ROAS of 1,118% describes those stores, not premium stores in general.

The two ends of the table need different pricing work. For expensive products, see our guide to high-ticket products in Google Ads. For cheap ones, see whether you can profitably advertise products under $15.

Within a single store, ROAS rises and falls with order value about as closely as with conversion rate. We looked at 1,360 store-months of GetProfit data (June 2025 – June 2026) and measured each store’s monthly change against the median store that month. The correlation of ROAS with order value was +0.540, and with conversion rate +0.527. With cost per click, it was only −0.100.

These are correlations, not proof of cause, but they put order value next to conversion rate as a lever. Three ways to raise it without new products:

• Bundles around bestsellers. A set built from what already sells raises the order value without a new supplier. See bundles built around your bestsellers.
• What shoppers buy together. Knowing which products end up in one order tells you what to bundle or recommend. See what shoppers buy with your bestseller.
• Thresholds and upsells. 10 moves to raise order value covers free shipping above an amount, volume discounts and a bigger variant.

How do shipping and returns affect Shopping ads?

Google’s best practice guide (Best practice guide for optimizing shipping and return configuration) names shipping speed and cost as two of the most common reasons shoppers abandon a purchase. Your shipping settings apply to Shopping ads and free listings alike. Our data has no shipping costs, so the rest of this section rests on Google’s rules and arithmetic.

Three rules matter most here:

• Keep shipping out of the price. Merchant Center Help (Price [price]) asks you to submit shipping through the shipping settings or the shipping attribute. Handling and service fees go into the shipping cost too.
• Make Merchant Center match the site. The best practice guide warns that if your rates in Merchant Center are lower than at checkout, your account can get a warning or a suspension.
• Set the free shipping threshold where Google can read it. You can set free shipping above an amount in an account-level rate table. With product-level shipping, you use the free_shipping_threshold attribute instead.

There is a catch in the attribute. According to Merchant Center Help (Free shipping threshold [free_shipping_threshold]), Google checks the threshold in this attribute against the product’s own price, not the basket. When the product meets the condition, the ad shows “Free Shipping”. The ad for a product priced below the threshold shows the standard shipping rate, even if most shoppers add a second item.

Our guide to setting a free shipping threshold shows how to pick the threshold from your order value and margin and set it up in Merchant Center.

Returns work the same way. The best practice guide says showing your return policy on ads and listings may help performance. The policy in Merchant Center must match the one on your site and live on its own page. When you change the policy, Google’s review can take up to 10 business days.

Worked example: a 10% discount or a free shipping threshold

Example store, not client data.

A tableware shop has 3,000 products. In a month it spends 40,000 on ads and gets 180,000 in revenue from 300 orders. Its ROAS is 4.5, its average order value is 600 and its margin is 35%. So its gross profit is 63,000, and 23,000 remains after the ads.

Option 1: 10% off everything. If orders stay at 300, the average order value falls to 540 and revenue to 162,000. The goods still cost 117,000, so gross profit drops to 45,000 and the margin to 27.8%. After the same 40,000 of ads, 5,000 remains instead of 23,000.

To get back to 23,000, the shop needs 420 orders, 40% more. Its ROAS would then be 5.67. The report would look much better while the profit stayed where it was.

Option 2: free shipping above a threshold. Say a parcel costs the shop 70. At a 35% margin, an order must grow by 200 to pay for that parcel from its own margin, because 200 × 35% = 70. So the shop sets the threshold at 800: the current average order value of 600 plus 200. Shoppers who add 200 to reach it pay for their own delivery.

If the shop puts the threshold in the free_shipping_threshold attribute, products priced above 800 show “Free Shipping” in their ads, because Google checks each product’s own price. Orders that were already above 800 now ship at the shop’s cost, so count them before you set the threshold.

The discount cuts the price of every order. The threshold asks for more in the basket and pays for itself from the extra margin. That is why discounts come last when you choose which pricing lever to pull.

Which pricing lever should you pull first?

Start with what costs nothing, and end with what costs margin on every order.

1. Make the feed price match the site and checkout. Check both price and sale_price on products that are on sale. A mismatch gets the product disapproved, and pricing only works on products that show.
2. List the products priced more than 20% above the market. In our data, 11.7% of them converted, against 20.4% at the market price. Check that Google compared the same product, size and configuration. Then decide for each: lower the price in steps of about 5%, or keep it and give the product a smaller share of the budget.
3. Don’t cut prices across the rest of the catalogue. Below the market, the share of products that sold barely changed. A catalogue-wide cut costs margin on products that were already selling.
4. Get shipping right. Make the rates in Merchant Center match checkout, set a threshold from your order value and margin, and put it where Google reads it.
5. Use discounts last, and count their cost first. Work out how many extra orders a discount needs: the discount divided by what is left of your margin after it. Send it as a sale price with dates. Judge it by gross profit, not ROAS.
6. Change one lever at a time. Compare equal periods before and after. If you lower prices and start a sale in the same week, you won’t know which one worked.

The portal’s feed section helps with step 2. It lists the products priced above the market with your price, the market price, the price gap and Google’s suggested price where Google gives one. It also warns when Google may have compared a different size or configuration. The portal doesn’t know your cost of goods, so the margin check stays with you.

Products priced above the market: your price, the market one, the difference and Google’s recommendation. Sign in with Google in one click, both Google Ads and Merchant Center. The portal changes nothing without your consent.

Check your feed →

Sources

• Price [price] — Merchant Center Help: the price is shown to users and must match the landing page and checkout, or the product is disapproved; shipping goes into shipping settings, not the price; handling and service fees belong to the shipping cost. Checked 2 October 2026.
• About Pricing in Merchant Center Analytics — Merchant Center Help: the Pricing tab; benchmark price, price gap and the GTIN requirement; sale price suggestions from 7-day simulations, purchase conversions required, cart data and cost of goods can improve them, shown only for significant predicted gains. Checked 2 October 2026.
• PriceCompetitivenessProductView — Merchant API reference: the benchmark price is set per benchmark country. Checked 2 October 2026.
• PriceInsightsProductView — Merchant API reference: suggested price, predicted change in impressions, clicks and conversions, effectiveness. Checked 2 October 2026.
• Set up automated discounts — Merchant Center Help: Google sets the sale price between your regular price and a minimum price; conversions with cart data and cost of goods required. Checked 2 October 2026.
• Sale price [sale_price] — Merchant Center Help: keep the regular price, sale price lower, both prices on the landing page and only the sale price at checkout; effective dates as a best practice. Checked 2 October 2026.
• About sale price annotations — Merchant Center Help: discount above 5% and below 90%, regular price valid 30 of the past 200 days, the countries listed for Shopping ads, no guarantee of display. Checked 2 October 2026.
• How To Add Merchant Listing Structured Data — Google Search Central: strikethrough price and sale price in structured data. Checked 2 October 2026.
• Understanding product pricing — Merchant Center Help: promotion price as a checkout discount across products; availability varies by country. Checked 2 October 2026.
• Best practice guide for optimizing shipping and return configuration — Merchant Center Help: shipping speed and cost among the most common reasons for abandonment; rates must match the site; free shipping above an amount; return policy rules and review time. Checked 2 October 2026.
• Free shipping threshold [free_shipping_threshold] — Merchant Center Help: the threshold is checked against the product’s own price; “Free Shipping” shows on the ad when the condition is met. Checked 2 October 2026.
• GetProfit study of 1,404,808 products, 130+ stores, 13 months — price against the market for 213,913 products in 51 accounts; results by order value for 128 stores.
• GetProfit data: 1,360 store-months, June 2025 – June 2026 — how ROAS moved with order value, conversion rate and cost per click within a store.