Dynamic pricing: a valuable asset to upgrade your sales strategy
What is dynamic pricing?
Dynamic pricing is a very popular pricing technique in the e-commerce world. This means that you vary product pricing depending on the market. It usually changes your prices several times per day, or even hundreds of times per day, as it takes into account even the smallest changes, such as a slight price reduction by competitors.
Why use dynamic pricing?
With dynamic pricing, you can increase your sales margin and your chances of making the sale because you are sure to make the right offer at the right time.
With this technology, if your main price competitor is out of stock and other competitors are selling for €10 more, your prices will automatically increase by a few euros to take advantage of this chance to increase your margin without reducing sales volume. With dynamic pricing, you can also have your prices indexed at 2 or 3% under the lowest competing offers. This way, you will always have the most attractive offer on the market, which will increase your sales volume. There are practically endless possibilities for how you can use this method to take advantage of the market.
To implement this technology, online retailers use dynamic pricing software. It monitors the market and adjusts your prices when it identifies a change. Dynamic pricing software takes care of pricing, but it is not fully automatic. It works with algorithms, so in simple terms, you have to tell it what changes in the market it should monitor, and how to react. In dynamic pricing circles, we call these pricing rules.
Some examples of pricing rules:
- When a customer visits a product sheet more than 10 times, increase the price by 5%.
- I want my prices to be €1 cheaper than the lowest competing offer.
- From February 7 to 14, increases prices in the “jewellery” category by 20%.
myPricing, the most complete tool on the market
If you wish to apply dynamic pricing, we recommend our tool, myPricing.
With myPricing, you can set up dynamic pricing on all your digital sales channels: personal website, marketplaces and even Google Shopping! We are the only company that offers such a variety of possibilities. Our tool revalues your prices up to 288 times per day in real time on Amazon.
In addition, we use the monitoring function to provide you with advanced market and competitor research features:
- Your turnover, sales margins, competitive positioning and the number of buy boxes you have won are all visible on your dashboard.
- Receive reports on the competition: price changes, customer returns, delivery times, etc.
Dynamic pricing, an essential technology
Today, the overwhelming majority of key account sales departments use dynamic pricing. This is no accident. Marketplaces are essential sales spaces but they have become hyper-competitive. In this context, being able to offer more attractive prices than competitors is a great opportunity to stand out.
This is particularly true since the customer is also aware of this hyper-competitive sales environment. This means that they will look at several similar offers before buying a product. In this situation, being able to offer a more attractive price will work in your favour.
Getting set up:
Our decision support tools guarantee you a successful dynamic pricing strategy! On average, users of myPricing for Mirakl experience a 20% increase in sales!
- Connect your marketplace to myPricing (instant)
- Import your product catalogue from the marketplace (30 s)
- Set up your pricing strategy (3 min)
- Review the simulation and adjust the strategy as needed (1 min 30)