What dynamic prices are and how to achieve a profit implementing dynamic pricing models
What is dynamic pricing?
Dynamic pricing is a retail practice which creates a pricing strategy based on setting flexible prices according to current market demands.
When implementing a dynamic pricing strategy, online retailers make the price assessment of the store considering the competitors pricing, time, traffic, conversion rates, and sales goals.
A dynamic pricing system works to increase revenue and make an online business profitable based on a reliance on dynamic repricing.
Dynamic pricing advantages
Dynamic pricing allows the pricing manager to timely react to market changes and reprice the products, product groups and categories as it is necessary for the position of the store in the market.
The recited advantages were picked up by the giant of online selling - Amazon, the online store.
Market pricing dynamics demonstrate how immediately the competition can be intensifying by high-speed Amazon repricing.
Every retailer wants to know about Amazon repricing software, but you must not blindly follow some retailers pricing behavior, even if it is so inviting, as in the case with Amazon.
It is not enough to attain the Amazon repricer for your online store development with the same efficiency.
A dynamic price should be set in correspondence to your main online store competitors, who must previously be detected.
Retail pricing formula
Dynamic pricing in retail can create the framework for the unique pricing strategy for every e-tailer.
Dynamic pricing strategies should include the conditions of your online store in the market, your main competitors, who actually influence your conditions and your customers’ price perception.
There is the factual evidence - 8 out of 10 customers compare prices in at least two stores before making an online purchase.
In view of the fact that competitors’ prices affect your customers’ price perception and largely influence your online store conditions, you have to operate the competitive data in order to implement the dynamic pricing online.
How to implement dynamic pricing
There are three ways to make the best use of dynamic pricing in retail:
The first: the pricing manager can use the price intelligence to optimize the repricing process in the online store with the help of competition monitoring data.
The second: prices can be dropped when demand is low.
The third: prices can be increased when demand is high.
Considering that market monitoring is a complicated and time-consuming process, pricing managers prefer to employ the dynamic pricing software and provide the automatic repricing of the online store’s product based on accurate competitive data.
Automatic pricing is a solution for the pricing manager, who will want to save their own time, as well for all the store, which itself is oriented on the gross margin and profit.
Competera is a dynamic pricing platform, which gladly helps you make your business more efficient.
because of benefits suggestions which are price monitoring on SKU level, timely data delivery (if one needs data at 9 am - Competera delivers it at 9 am), notifications on competitors price changings and price history analytics.Learn more