8 ways of increasing your profit margins using Pricing Intelligence

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Angela de la Vieja

By the term 'Pricing Intelligence' we refer to the process of price fixing based on real-time rules. An intelligent business could vary its prices based on multiple variables, with the aim of obtaining the maximum profit margin possible for the same number of sales.

This means that from the very first moment of application of the intelligence to our businesses, every sale, be it present or future, will give us greater profits in return.

Let's consider some of the techniques of the 'Pricing Intelligence' or 'Smart Prices' application:

  1. Firstly, Minderest is the only market solution available using 'Pricing Intelligence' software with complete technical support for Spanish speakers. With Minderest, you will be able to monitor the prices of your direct competition and know both what their prices are and their fluctuation tendencies.
  2. It provides an added value to your products and you will be able to increase your prices. A client will be willing to pay more for a product if they consider its value to be more. Examples of this technique include an increase of the return period, a reduction of the delivery costs or including a small “token present” in the order.
  3. Adapt the prices to your brand. If you are a new competitor on the market, it isn't recommended to market your product at the lowest price, as the client will associate a low price and unknown brand with bad quality. Instead, use a mid-range price. If, on the other hand, you are a recognised brand, you will be able to slightly increase your prices without reducing the quantity of orders.
  4. Monitor your marketing actions. See how your sales vary depending on the increase or reduction of prices. Do your sales go up or down? Find the price that clients feel comfortable with.
  5. Monitor your competition's marketing actions. What is the price evolution for given products in their range? Are they increasing or decreasing their prices?
  6. Adopt a decreasing price strategy. It is better to start with high prices and reduce them according to the demand than to start with low prices and to progressively increase them.
  7. Do not enter into a price war. Monitoring prices does not always mean selling more cheaply, in fact, in doing so, you will only make your product become cheaper and cheaper until finally it stops being profitable. Observe your competition and find a similar price with which your clients are comfortable.
  8. Go a step further than your competition. If their stock has run out, it is a good moment to slightly increase your prices, whereas if they have launched a great offer onto the market, adapt your prices accordingly so that you are still competitive.

Analyse, test, but above all, be patient.

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Consumer behavior: How can behavior tracking be effective for setting the right pricing strategies?

Behavior tracking is becoming massively popular today. As a result, pricing strategies born from studying consumer behavior are a merchant's dream come true. If done right, it can conquer every market for the business quickly. With abundant data available, the strategic makeover of the pricing models is becoming easy for companies. 

What is behavioral tracking, and how is the data beneficial in pricing?

For a quick understanding, behavioral tracking refers to gaining in-depth knowledge and insights into consumers through their web data. Their browsing habits, spontaneous decisions, shopping interests, and preferences come under behavioral tracking. 

How can enterprises use customer behavior data?

Companies can use customer behavior data as a tool to strengthen their hold on the market. A customer’s preferences, values, and tendencies allow businesses to work in sync with them through the collected data. Apart from this, customer behavior can also aid in:

Tailoring customer needs for customer retention

Personalization is becoming the heart of a company’s growth. No matter in which area an enterprise is functioning, tailoring the services, products, and solutions is becoming increasingly crucial. Uniqueness and personalization attract the crowd like no other. 

Increasing the overall value

One of the best ways customer behavior data affects a business is by upgrading the value of customers for the business. The customer’s characteristics allow the company to target the people that match the business prospects well. 

Optimizing every type of content

Everything that is up for digital display requires content. You must have seen companies unveiling their products or services through advertisements and making the initial public appearance. Two essential sales strategies – upselling and cross-selling comes through content optimization.

Pricing Strategy

Last but certainly not least is the influence of customer behavior data on the pricing strategy. The pricing strategy essentially constitutes content derived from data analysis. Companies need to have a dynamic approach to the pricing system to attract the right customers. 


Saint Valentine’s Day, always a good opportunity

V-Day is looming, a long-awaited date for all and also a good occasion for the eCommerce. According the study conducted by Prosper Insights and Analytics, it is forecasted the average consumer expense that day will be the highest in last years. Furthermore, 25% of them will buy online, which means an increase of 4% regarding 2014 (The US department of Commerce). This is, therefore, a key date where market competitiveness increase and which could be assumed as a big opportunity for our business or, a big fail if we do not adopt the correct strategies.

How to turn this event into an opportunity? To achieve this goal, we need to adapt our prices to this hostile environment, i.e. we need to develop an appropriate Dynamic Pricing strategy that allows us to adapt our prices to the variations produced in supply and demand and to position us ahead of our competitors. In V-Day, the frequency in changes will be higher, carrying it out each hour or even each minute. It is estimated that 65% of leader retailers have the ability to respond quickly at these variations, such Amazon. For this reason, it acquires great importance the correct use of a software specialised in price motorisation of competitors. Do not miss the time and adapt your business to new adversities.


Which are the best footwear marketplaces to sell on?

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