How to avoid losing sales with a competitive strategy in Dynamic Pricing

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Profile picture for user Ángela de la Vieja

Ángela de la Vieja

Manage the online catalogue of an e-commerce is a complex task which requires great resources of time and money.  By management we understand:

  • Choice of brands and products.
  • Obtain product photographs.
  • Denominate the product (name).
  • Description of the product.
  • Election of the sale price.

From the previous characteristics, obtaining of the product photos, the denomination and the description of the product can be considered statics. This means that while the product does not change (concerning the characteristics or versions), the maintenance of this information is not necessary.  On the contrary, the election of the sale price must be something variable in the time, depending on supply and demand.

Many e-commerces make the mistake of maintaining fix prices. Once the supplier provides them with his price list, while this does not change, the ecommerce maintains its sale price. This means that for months, thousands of products will have a static price.
In practice, others e-commerces, will launch offers, will reduce prices or even the same product will lose value, as the time passes and demand decreases.

So, how do e-commerces react at these variations?

Monthly (in some cases quarterly), sales reports of brand and category are made, and in this moment is possible to detect when a product stops generating sales. In the particular case study, is detected that competition decreased the price months ago, and therefore the e-commerce ceased being competitive.

With a successful price strategy, just few hours after a price variation in the competence, the system would had alerted the client, so that adjusting his prices, he had never ceased being competitive.

Which benefit does this mean for the e-commerce?

It would had prevented the loss of sales since ceased to be competitive, i.e., it would had kept a constant turnover. Price management should be an indispensable characteristic for the success in the online world, where your same products are commercialised by hundreds of companies to the same clients.


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