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The Pros and Cons of Using Dynamic Pricing in eCommerce

Friday, July 31, 2020  |

If you are an e-commerce retailer that struggles to maintain an edge on their marketplace, it is well worth exploring dynamic pricing as a means of gaining ground on the competition. With this form of price-setting, you are able to ride the waves of market upheavals, keep stock moving, and sustain high cash flow. In fact, it is likely that your sectors main competitors are using this pricing method right now.

Dynamic pricing is where businesses set flexible pricing for their products and services on the basis of market demand. It is also known as:

  •  Time-based pricing
  • Surge pricing
  • Business demand pricing

You may already have come across this type of pricing when purchasing airline tickets as it has been a feature of the travel, hospitality and energy industries for several decades. With the explosion in e-commerce and advanced technologies, dynamic pricing can be readily available to your business.

Why implementing dynamic pricing can help your online business leverage significant gains. You are likely to find that when properly set up, dynamic pricing adds appreciable momentum to your online store. Here are some key advantages of e-commerce dynamic pricing for your enterprise.

  1. 1. It is an efficient way of growing sales as you can adjust your price point to close as many sales as possible at a given time.
  2. 2. You can always ensure that your price is right for market conditions.
  3. 3. Increase profitability as your stock does not sit still. 
  4. 4. Enjoy superior control of your margins and growth with tech-driven platforms that provide the intelligence you need to make the right decisions quickly.

The reason why dynamic pricing may not be for you…or your customer base.

Not every business can execute dynamic pricing effectively and if it goes wrong it can do serious reputational harm and even lose money. This is why dynamic pricing should be underpinned by tested algorithms based on authentic sales surveillance, rather than reactive see-saw pricing. 

Customers also can be alienated by fluctuations in price, that erode the sense of value and trust in what is being sold.

Getting and staying ahead of the competition requires expertise.

To master successful dynamic pricing your business needs the expertise and computing power of leading software and technologies that use market-leading algorithms to crawl your marketplace (including leading e- retailers like eBay and Amazon) and undertake automated or controlled price adjustments across your inventory.

Working with e-commerce specialists like us means that you can engineer dynamic pricing solutions that will but your business at a maximum advantage, keeping stock moving, building profit and establishing growth.

Dynamic pricing for e-commerce with as much or as little control as you need.

Talk to our team today about how you can benefit from a range of dynamic pricing solutions that can be tailored to the precise sales objectives of your business. Our experienced e-commerce team works with the leading e-commerce software and platforms, streamline and optimise your online store so that it can realise its potential. Call or email us today to start the conversation.

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