The 4 key price monitoring indicators

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key price monitoring indicators


Profile picture for user Ángela de la Vieja

Ángela de la Vieja

In the new digital paradigm, all brands and companies that sell online constantly monitor what their competitors are doing.  Price monitoring, inside and outside of marketplaces, is essential to maintain their activity within an increasingly unrestrained market.

Price monitoring and management tools are increasingly demanded by these users.  They will split the actions that are framed in the pricing strategies of each brand.  However, the obtained results require good analysis and interpretation if you want to make the right decisions.

In this respect, it should be noted that the price monitoring tools are on track, in terms of the quantity and complexity of the data collected.  However, it is important to understand which indicators are key for monitoring competitor pricing and to consider the correct ones before making decisions.  Here we highlight four that can become very relevant and which go beyond the mere fluctuation of prices.



1. The average price of the product over time.  At the height of the digital price battle, continuous and aggressive changes can cause what is known as price erosion. This erosion causes the average price of certain products to suffer large devaluations.  Knowing under what circumstances these situations occur is key to not fall into the trap of offering unusually low prices and end up not generating profit.  The volume of sales must always compensate the price offered.

2. Market behavior patterns.  Who’s who within your competitors?  Identifying the relevant actors within the market is essential to know what the true steps to take are.  Who is the first to lower price?  Does it make sense and is it reflected in the results?  Guiding us by non-sensical strategies within our sector can have us incur serious errors.  Having a clear idea who is the leader to follow is key to our own references.

3. Characteristics of competing businesses. This does not mean that you do not know in advance who you will face on the Internet, far from it.  However, it is essential to compare prices and sales results with competitors that are similar to our level.  In a project to improve our position, knowing how to limit our aspirations is essential to promote successful growth.  However, it is important to consider who’s pricing strategy you can assimilate, for a specific brand, in a way as not to lower profit margins when competing with others.

4. Temporary dimensions.  When analysing our competitors price fluctuations we already know that it is necessary to check if these correspond to dates of offers, sales, promotions, etc.  But, if we go a step further, we will see how not only the calendar is important in this respect, but that there are many other temporary dimensions that can affect the products price and, predictably, any increase in sales.  Seller activity studies, in platforms such as Amazon or eBay for example, reflect how the price of some products may vary during the day, in anticipation of the demand that exists at certain key moments.

Taking these points into account is of vital importance when it comes to correctly analyzing the data collected by a competitive price monitoring tool.

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