Dynamic pricing can increase profits by as much as 25 per cent and is one of the most sought-after features for a wholesale ecommerce platform. If you are not sure what dynamic pricing is or how it works, the information contained in this article will give you a broad overview of the benefits. The b2b sector, which includes wholesalers, distributors and dealers, has a lot to gain from this advanced ecommerce pricing system.
Comgem, the principal developer of wholesale ecommerce platforms in the UK, describes dynamic pricing as “the most effective way to automatically vary the price of a product or service to reflect market conditions”. It says, by charging a higher price when demand peaks wholesalers can significantly boost profits.
Every sector sees peaks and troughs in trade. Dynamic pricing supports the wholesale ecommerce platform by increasing or decreasing prices to match demand. For example, a price decrease may be necessary if demand falls. This ensures a wholesaler’s price matches market trends while never falling below a floor price. Dynamic pricing can take into consideration the general trend, internal or supplier stock levels and competitor data - on a product-by-product basis. Apart from shifting slow-moving stock, this smart approach helps businesses meet goals while remaining highly competitive.
By taking market conditions into account, dynamic pricing helps wholesalers maximise profits all-year round. This technology can detect if you are selling a product at a higher or lower price than your competitors and adjust pricing to make your offer more attractive. Importantly, it ensures your business stays one step ahead at all times. You will never sell below cost and attract buyers researching product prices with the best possible deal.
While the wholesale ecommerce platform with dynamic pricing is likely to increase profits by up to 25 per cent, research has mostly centred on gross margins across multiple sectors. Research by Forrester found that automated price optimisation increases gross margins by 10 per cent - a not insignificant amount. Add to that the benefit of raising prices to ensure you don’t run out of specific stock and you can gauge the wider advantages.
Dani Attard, co-founder of Comgem, says:
“The days of manual repricing should be over. Dynamic pricing negates the need for potentially thousands of SKUs to be physically changed - sometimes more than once a day. As well as being efficient, this system simplifies a complex problem for wholesale ecommerce platforms and makes them much more aggressive when it comes to competitive pricing.”
Learn more about advanced features for the wholesale ecommerce platform here.