If you manage an eCommerce business, you've probably have heard of dynamic pricing, even if you're not quite sure what it refers to.
With the post-pandemic boom in online commerce, this model has been climbing the ranks and it's not just a coincidence. Although it is undeniably a very profitable strategy for e-commerce, dynamic pricing is not new. However, processes and tools to automate the ideal pricing for each product are changing the rules of the game.
Want to know why this is one of the most used strategies in the online market? Here we explain it to you:
What is "Dynamic pricing"?
Dynamic pricing strategies consist of adjusting product prices constantly according to suggestions based on a set of rules and parameters. It is a flexible strategy as it uses real-time data to adapt your prices to market trends.
By setting rules, you can define the requirements for your products and set the most competitive prices based on your business needs, sales expectations or market behavior.

How it works?
One of the great advantages of this type of strategy is that it allows you to automate processes. By setting rules and parameters, it is possible to make price changes automatically in your eCommerce, without the need for you to make the changes manually.
Does this mean that prices are controlled by themselves?
Not at all, quite the contrary. This strategy allows you to control multiple indicators to keep a detailed control of the variation of prices. You set the rules that allow you to automate the process.
Why should you implement dynamic pricing in your eCommerce?
If you have an eCommerce, this strategy offers 5 main benefits for your business:
Increased Inventory Management Efficiency
Dynamic pricing helps with inventory management by optimizing your pricing strategy based on the stock levels of products. When you have surplus inventory, you can lower prices to encourage sales and clear out stock. On the other hand, if inventory is running low for a particular product, prices can be increased to capitalize on the limited availability and boost demand.
Stay Competitive with Real-Time Price Adjustments
One of the most significant advantages of dynamic pricing is the ability to stay competitive by adjusting your prices based on real-time market trends. In industries where competitors constantly adjust their prices, dynamic pricing ensures that your store’s prices are always aligned with the market, preventing you from being underpriced or overpriced in comparison.
Improve Customer Experience with Personalized Pricing
Another benefit of dynamic pricing is its ability to personalize the shopping experience for your customers. By using algorithms to analyze customer behavior and preferences, you can adjust prices for specific customer segments. For instance, loyal customers or high-spending shoppers can receive personalized discounts or offers, which not only encourages repeat purchases but also strengthens customer loyalty.
Maximize your profits
Dynamic pricing allows you to adjust prices based on real-time market conditions, including competitor pricing and customer demand. By continuously monitoring these factors, you can increase or decrease your prices to capture more revenue during high-demand periods while remaining competitive during slower sales periods.
How to establish dynamic pricing (without dying in the process)
The key to success in this type of strategy is having the right data to make the right decisions. There is no one secret formula that works for all types of stores, but it is necessary to have the information you need to adjust your strategy to the needs and demands of your customers and optimize your profit margin.
Tools like Planet make it possible to easily keep detailed control over your stock, the movements made by other competing stores and the metrics that make your business grow. In addition, it allows you to build predefined rules and actions to automate price changes of your products, getting the most from your dynamic pricing strategy.