The Concept of Dynamic Pricing
Dynamic pricing is one of the hottest topics in the field of eCommerce.This is not a new concept in trend but people are using it for a long time and its been here since 1970,s one of the airline industries used it at that time but it took a great place in today’s world. It is one of the most relevant in the new world of eCommerce business.
If you have your eCommerce business you should surely choose the dynamic pricing for your e-commerce business and it will help you to raise your business.
What is Dynamic Pricing?
Dynamic Pricing is a process in which product price changes within minutes according to the real-time supply of the products. It helps you to sell the product to a group of people at different prices. Amazon is one of the most top leading eCommerce stores in the world and they are using dynamic pricing for their products and they update their price every single minute for some of their amazing products.
Benefits of Dynamic Pricing
It makes your brand flexible without harming your brand value
A number of brands are using dynamic pricing but some of the brands think that it will harm their brand and product ratings but it’s not just like that you can get a good chance to raise your business value by using dynamic pricing. Using dynamic pricing will help you to raise your product prices as real-time product price trends and it will not even affect your product and your brand ratings because it works according to the real-time effect and people don’t feel bad about these things.
It helps you in your pricing strategy
A most common thing people think about dynamic pricing is that it will affect your pricing strategy but it's completely opposite to that. It will mainly help you to check thousands of people working on the same thing and number of the same products and it will only help you check the product value on real-time bases and you can change the product rate anytime. It will help to raise your revenue by looking at the price changes of competitors and it becomes easy to check what’s the value of the product at the current time.
It saves your money for a long period
Dynamic pricing is completely based on real-time bases and it will always help you raise your revenue by looking at the current scenarios of the product value in the market. It checks the complete industry prices and then finalizes the product value on a real-time basis.
It will always provide you the complete and correct information about the product value that can be used to set your product price perfectly and you can get profits even during the price fluctuations.
It can be easily managed by a software
When you are using dynamic binding there are a number of calculations and you have to check various products value on real-time bases at a time it becomes tough to do all these things at the same time but nowadays as dynamic pricing is so trending, some software can be used to do so and it becomes easy to complete this work with the help of some software. One of the best software used for dynamic pricing is Wiser. It helps you to calculate the dynamic pricing and check the real-time price of the product.
Types of Dynamic Pricing Strategy
Segmented pricing strategies offer different prices for everyone. It offers different prices and offers for top-level consumers. They offer different quality speeds and services for their customers according to priority.
Time-Based services are used only at the time when a company charges more from the people who request the same day service. It means that the company will provide you the service on the day you ordered something.
Market conditions Pricing:
Market condition pricing depends upon the situation of the market sometimes the product price gets low in the market so it depends on the situation of the market.
Peak pricing means the change of price during peak hours according to the market situation too.
Implementing Dynamic Pricing in your Ecommerce store
Implementing dynamic pricing is not such a tough task so check some of the steps that will help you to easily implement your dynamic pricing for your eCommerce store:
Step-1 Explain your Commercial Objective clearly
Before you start implementing dynamic pricing for your eCommerce store you should be clear about the things you want to do for your business and what are your future goals for your eCommerce store. Your commercial objective is defined as the things you want for your eCommerce business and what the customers are expecting at the time.
Whatever your business is and what you are trying to sell you have to be completely sure about the things and have complete knowledge about the business before you are implementing the dynamic pricing. Commercial Objectives work as the root for your eCommerce business and it will help you implementing dynamic pricing that helps you achieve your goals.
Step-2 Building Dynamic Pricing Strategies
The second step towards your dynamic pricing is to completely know your dynamic pricing strategy.
Pricing Strategy completely depends upon your commercial objectives so it could make smarter choices for dynamic pricing strategies. Let’s take an example if your commercial objective is to increase clarity but also achieve profits, you can follow the “high-runner” strategy regularly used by Amazon.
Step-3 Choose your pricing strategy method
There are different methods you can choose for your dynamic pricing check out some of them below:
- Cost-Plus Pricing: It is the most straight-forward pricing method. The starting point is the cost per product, where the desired margin is added to calculate a selling price.
- Competitor based pricing: It is the pricing strategy that completely depends upon the competitors changing the price.
- Value-Based Pricing: It is the strategy that mainly considers the consumer’s perception of the product.
Step-4 Establish Pricing rules
After these two steps check out the pricing rules we can now get directly to the pricing rules and get the task done.
Step-5 Test and Trace the dynamic pricing
After all the steps and tasks are performed your pricing strategy is ready to be implemented and after this, it is ready for the validation and starts monitoring the same.
A complete and informative commercial strategy leads to great input for the good Dynamic pricing. It helps you to raise your revenue and focus on your goals and earn good money until the future.
We recommend following all the steps mentioned above to get a successful dynamic pricing implementation.
Keep it in your tips that change your dynamic pricing strategy according to the competitor’s value to create a good difference in the market.