Whether you are a beginner or an experienced seller, setting the right purchase price is always challenging. If you define your prices too high, customers will turn their back to you, and if your prices are too low, you are not going to see much profit. Things get even more complicated in today’s competitive market, where you can’t think only of setting the price, but also of doing constant repricing (price changes that can happen very dynamically).
So, how do you create a repricing (dynamic pricing) strategy that suits your business needs in the best possible way?
What is repricing (dynamic pricing)?
In order to know what steps are required for a solid repricing strategy, first, you need to get a better understanding of what repricing actually is and how it works. Repricing is maybe one of the most used pricing strategies because it means that you are setting your prices according to your competitors. The idea seems pretty simple – you are constantly following the actions of your competitors and accordingly, you decide on lowering, increasing or having the same prices as they do. This means that repricing is a never-ending process – you need to constantly change your prices in order to stay ahead in the market. Repricing can be performed either manually or automatically, but there are many tools available on the market whose help you could use – one of them being Price2Spy.
How does Price2Spy’s Repricing Module work?
The Repricing module is meant to help you define your own pricing strategies, which can be segmented either per product category, brand or supplier (or it can be used for all the products in your Price2Spy account).
Further, this module will help you make concrete repricing decisions, and keep track of decisions you’ve done in the past. That way you will have a clear insight into the pricing decisions that you’ve made, and according to the accomplished results, you will be able to decide on the further steps.
Repricing strategies that Price2Spy offers
As we have already mentioned, repricing might not seem so difficult, but when you actually need to perform it, you’ll see that it is not so easy at all. There are a few possible strategies that can be used, but here in Price2Spy we have identified 3 default types:
The importance of ‘purchase price’ in Repricing
From everything said above, we can assume that you’ve noticed the importance that purchase price has in the repricing strategies.
Currently, a clever drop can not be created if a client doesn’t have purchase prices defined. However, if he defines purchase price for only one product, this opportunity is created for all products. The only difference between affected products with and without purchase price is that products that don’t have purchase prices don’t have calculated profitability.
Why we introduced a clever drop to be created without a purchase price?
Now, when the importance of purchase price is hopefully more clear, you would have the full right to ask why is Price2Spy then allowing clients to create a clever drop without the purchase price? Well, since some of our clients approached us with the same request, and as we always strive to meet their needs, we’ve decided to introduce this option as well.
Therefore, when creating a strategy Repricing >> New strategy (if there are no purchase prices), on the second step the option I want to maintain profit margin (based on product’s purchase price) should be disabled. If a client later adds purchase price it would become available and editable when he goes to Edit.
However, we don’t recommend this as a solution right away. First, we tend to explain to the clients all the pros and cons so that they can rethink their request once more.
We have tried to briefly explain the importance of purchase price, and pricing strategy in general. As you can see, there is no need for making rushed decisions – take your time to carefully analyze what strategy would be most appropriate for your business. Hopefully, you’ll make good use of this new Price2Spy feature and become more competitive on the market by changing prices on time!
Do you find this new feature useful? Please let us know what you think – feedback is always appreciated!