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 in order 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:
- Automate processes: set appropriate rules and parameters to modify the prices of your products using dynamic pricing tools and forget about doing it manually.
- Increase the competitivity of your business: Put your eCommerce at the level of your competition using dynamic prices according to your market.
- Control your prices: Increase control of your strategy by setting the optimal amount for your products at each moment.
- Save time and maximize profits: use price management software to automate your strategy and optimize time and resources.
- Maximize your profits: achieve the maximum benefit for each of your sales by calculating the best price for each product according to market supply and demand.
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.