Repricing: It’s not just about dropping your prices!
Pricing is the backbone of the eCommerce industry. Every day, and even every hour billions of prices around the world are changing, and that process is known as repricing.
The reasons behind fluctuating prices are numerous – change in demand, change in competitor prices, overall market conditions, and so on.
Even though repricing is not so new anymore, for many people it still represents a synonym for a price drop. However, that’s far from the truth.
What is repricing and why is it beneficial?
Repricing is probably one of the best-known and most popular pricing strategies. It means that the prices are flexible which allows retailers to have a timely reaction.
It is well known that pricing is one of the main factors behind purchase decisions. If we add to that the fact that around 80% of customers tend to surf around before making their online purchases, and that the prices on some websites can change even every 10 minutes, we’ll come to a simple conclusion. Repricing matters a lot.
Whether you’ll be able to create a comparative advantage above your competitors or not will directly depend on how successfully you manage the repricing process. Further on, the profit and the overall business success will also depend on this process.
When dealing with a broad product assortment on different marketplaces, defining the right price manually is an impossible task, let alone accurate. Hence, you will need to lean on some of the price monitoring tools. There is, however, a popular belief that price monitoring tools do the repricing by only lowering the prices. That’s a common misconception.
Price drops and price raises – two ways of using repricing
Of course, there are situations where lowering the price is required, but repricing can also be used in the opposite direction – to increase the prices.
With an automated price monitoring tool, you will be able to see where you stand. Thus, price drops can be a smart option if the results show that you’ll remain profitable even with the lower prices, but for example, get a more market share. On the other hand, price drops require some extra caution. They can easily evolve into a price war which is a scenario that every business should avoid. There is a fine line between staying competitive and entering price wars, so think carefully about your steps.
Another option, which companies approach rather timidly, is raising prices. Businesses usually think that raising the price will have a negative impact on the customers. That’s true, but only if you do it recklessly.
If you, however, rely on a price monitoring tool that will precisely show you where you stand compared to your competitors, there would be no need to worry. You’ll know exactly how much room for increasement there is (of course, without harming your market position). Hence, everything will be well thought through and not based on purely assumptions. This will result in more profitability and a better market position, while, at the same time. you’ll not be losing the existing customers.
Nowadays, there are many price monitoring tools available on the market. A bigger choice is usually better, but at the same time it can create confusion. Since these are very important decisions that can affect the course of your business, you should always rely on someone experienced and trustworthy.
How can Price2Spy help?
Price2Spy is an online price monitoring tool that offers a wide range of pricing solutions to brands and retailers coming from different industries. Of course, one of our main features is repricing.
One would assume that Price2Spy is mostly used for lowering one’s prices by following competitor’s price drops. However, after being present on the market for so long, we’ve learned how to recognize our clients’ needs.
That’s why we know that our clients are smarter than that! They see the bigger picture and understand that there is no one-size-fits-all.
The stats accumulated over 3.5 years that repricing feature has been in use says:
As you can see, the repricing job is not only to advise price drops but to apply price raises where there is room for it. That further means that Price2Spy helps not just adjust prices downwards, but also get more profit, where possible – and our clients are very much aware of this.
Conclusion
In a dynamic environment, such as eCommerce, there is no universal solution or approach. Thus, don’t just blindly follow the trends, or believe in everything. Almost every solution or feature can be used to your advantage – you just need to find the right approach.
When choosing a price monitoring tool, flexibility, and customization are something that needs to be taken into consideration. Hence, choose carefully where you’ll put your trust.
We know how important these decisions are, so we offer you to test our service during a 30-days free trial period. Afterward, you can become one of our satisfied clients!
What are your thoughts on repricing? In which way are you using it?
We would love to read more about it in the comments!
