Inventory management and pricing strategies

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A well-managed inventory is essential for any business or eCommerce store. Optimal inventory management should reflect a balance between the interests and expectations of your clients and your costs. That’s to say, having enough items in stock to satisfy demand while keeping inventory costs at a minimum.

The presence of “dead stock,” excess stock with a high probability of not being sold, occupies space that could be dedicated to more successful products while also increasing operating costs. Conversely, if your stock level is low, you could be missing out on sales opportunities.

Excess inventory

Beat the competition’s price if you have too much of a certain product in stock

You should be the most competitive player in the market, even if this makes you lower your profit margin. A competitor price monitoring tool will allow you to identify the competition’s prices so that you can set yours below theirs and offload this stagnant part of your inventory.

Use pricing psychology

To maintain control of any excess inventory, here are some tips that use pricing psychology.

  • “Price Anchoring”: place a more expensive item from the same category next to the one that you want to offload. This will awaken the customers’ interest and increase the chances of a sale.
  • “Bundle offer”: grouping two different products together as a special offer is a trick that you can use to reduce the number of products with excess stock and of low yield.
  • Free products: offer something for free with a product that sells well. You can use this to improve the rate of sale for that product.

Low inventory

In the majority of cases, we can increase the price of a product that is in high demand if we have a limited supply of stock to avoid running out of that item too quickly. This can be useful in special situations where there’s a lot of demand for a product, whether due to popularity or exceptional circumstances.

Your competitor’s stock

Knowing your competitor’s stock is a key piece of information offered by monitoring tools. These tools will notify you when a competitor runs out of stock, which will put you at an advantage. Your chances of selling that item will increase and you’ll even be able to increase your profits through its sales. This is because if the user perceives the good as limited, their willingness to pay for that product will go up, so they’ll accept a small increase in the price of that product.

Dynamic pricing and inventory management

Thanks to dynamic pricing tools, you’ll be able to go one step further and integrate values such as seasonality and sales volumes into your pricing rules for inventory management. With this, you’ll ensure that your stock rotation follows an optimal cycle. For example, if your eCommerce business sells swimwear, a dynamic pricing system will take into account what month it is (at the beginning or the end of summer) to adjust your prices accordingly while considering the sales volume, stock availability, and the prices of the competition, among other values.


Angela de la Vieja
Content Manager
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A leading Competitor Price Monitoring software for retailers and manufacturers