{"id":5961,"date":"2019-06-14T07:43:58","date_gmt":"2019-06-14T07:43:58","guid":{"rendered":"http:\/\/www.price2spy.com\/blog\/?p=5961"},"modified":"2019-06-14T07:43:58","modified_gmt":"2019-06-14T07:43:58","slug":"essentials-for-e-commerce-pricing-optimization","status":"publish","type":"post","link":"https:\/\/www.price2spy.com\/blog\/essentials-for-e-commerce-pricing-optimization\/","title":{"rendered":"Essentials for E-commerce Pricing Optimization"},"content":{"rendered":"<p>Customers are very sensitive to price changes. People\u2019s spending habits are limited by their budgets. And any price change can affect and change them. Because of this, the demand for some products will change due to the price\u00a0changes\u00a0(up or down). This is known as the\u00a0<a href=\"https:\/\/en.wikipedia.org\/wiki\/Price_elasticity_of_demand\">price elasticity of demand<\/a>. For example, if the price of gas goes up, the demand won\u2019t be much affected, since it\u2019s one of the products that is needed for everyday life. But if the price increases for something random, let\u2019s say chocolate, the demand will go down. People don\u2019t need it. They\u2019ll just substitute it with a cheaper brand or other sweets.<\/p>\n<p><a href=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2019\/06\/pricing-optimization.png\" rel=\"attachment wp-att-5976\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-5976\" src=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2019\/06\/pricing-optimization.png\" alt=\"pricing optimization\" width=\"600\" height=\"250\" srcset=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2019\/06\/pricing-optimization.png 600w, https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2019\/06\/pricing-optimization-768x320.png 768w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><\/p>\n<p>Basically, the price effects the demand and supply characteristics and the demand determines a company\u2019s position on the market. If\u00a0a company can\u2019t offer a competitive price, it will be a big problem for them. It leads to fewer sales, less profit, all in all, it leads to poor business performance. This is where pricing optimization comes in the game. It is one of the most important tasks, but also one of the toughest.<\/p>\n<p>First of all, optimization is a decision-making process which uses data, software, and algorithms to make recommendations. And pricing optimization is using all of that in order to <strong>make better pricing decisions<\/strong>.<\/p>\n<p><strong>Why use and automate pricing optimization?<\/strong><\/p>\n<p>Pricing optimization brings many benefits to the company, especially\u00a0when the process is automated.\u00a0Let&#8217;s see what are the crucial benefits that will make your business sail smoothly:<\/p>\n<ul>\n<li><strong>Competitive price<\/strong>\u00a0&#8211; everything is turning around the right price. By analyzing different factors (like the ones mentioned previously) pricing optimization helps companies find and apply the right prices for their products.<\/li>\n<li><strong>Speed of decision making<\/strong> &#8211; automating pricing optimization process saves time &#8211; one resource that money can&#8217;t buy. It increases the speed of decision making.<\/li>\n<li><strong>Reduces required manual effort<\/strong> &#8211; Employees can focus on other, value-adding tasks, while the software is dealing with pricing optimization.\u00a0 Plus when changes occur too often on the market, people need more time to adapt and find the right price, but not the software.<\/li>\n<\/ul>\n<p><strong>How to automate pricing optimization?<\/strong><\/p>\n<p>Since this is a very hard task, companies turn to software solutions such as\u00a0<a href=\"https:\/\/www.price2spy.com\/\">Price2Spy<\/a>. The tool offers fully automated pricing optimization, to be more precise, price monitoring and repricing services.\u00a0<a href=\"https:\/\/www.price2spy.com\/en\/strategy.html\">Repricing<\/a>\u00a0allows companies to define their own pricing strategies (can be segmented either per product category, brand or supplier) identifying which products can go up \/ down in price, and get these prices changed in their online store in a\u00a0<a href=\"https:\/\/www.price2spy.com\/en\/strategy\/direct-repricing.html\" target=\"_blank\">direct<\/a> or an <a href=\"https:\/\/www.price2spy.com\/en\/strategy\/indirect-repricing.html\" target=\"_blank\">indirect<\/a> way.<\/p>\n<p>Of course, when setting up pricing optimization rules there are many factors that you need to think about. Some of the most important ones are; your own product price, competitors&#8217; product price, products stock availability, products&#8217; purchase price, desired profit margin, targeted price (MAP), etc. Each of these has a certain impact on your price, which affects the demand for a\u00a0product.<\/p>\n<p>Depending on your situation, Price2Spy offers different, default pricing optimization options.<\/p>\n<ul>\n<li>If you have an overpriced product, there is a possibility that a price can be lowered and your business performance will still stay good. This option is called a\u00a0<strong>clever drop<\/strong>. Here because of the purchase price (or production costs) and the profit margin you can somewhat lower your price and still make money (without jeopardizing your success).<\/li>\n<li>Next, we have a reversed situation \u2013\u00a0<strong>clever raise<\/strong>. In this case, your product is underpriced compared to the competitors. With right pricing rules, you\u2019ll be able to raise your price, just enough not to put your sales in danger and increase your profit.<\/li>\n<li>The third option isn\u2019t really about the pricing, but\u00a0<strong>stock opportunities<\/strong>. Here you\u2019ll see which products your competition has but you don\u2019t. It will help you create a better and well-rounded offer for your customers.<\/li>\n<\/ul>\n<p>Since Price2Spy is very aware that default repricing opportunities aren\u2019t going to meet everybody\u2019s needs, we\u2019re also offering\u00a0<a href=\"https:\/\/www.price2spy.com\/blog\/price2spy-enables-custom-repricing-opportunities\/\" target=\"_blank\">custom repricing opportunities<\/a>. You\u2019ll set your\u00a0own repricing logic and we\u2019ll implement them for you. It\u2019s easy like that.<\/p>\n<p>Keeping up with the market is hard. If you have many products, it&#8217;s near impossible to keep track of all of them and change their prices manually. On top of that, you can&#8217;t only think about your goals, because you also need to think about your customers, since they&#8217;re the ones that keep you in the business. That&#8217;s why pricing optimization is a great help when it comes to finding the middle ground between companies&#8217; goals and customers&#8217;.<\/p>\n<p>Let us know your experience with\u00a0pricing optimization softwares.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Customers are very sensitive to price changes. People\u2019s spending habits are limited by their budgets. And any price change can affect and change them. Because of this, the demand for some products will change due to the price\u00a0changes\u00a0(up or down). This is known as the\u00a0price&#8230;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[108],"tags":[387,388,190,47,12,532,128,134],"class_list":["post-5961","post","type-post","status-publish","format-standard","hentry","category-best-practices","tag-clever-drop","tag-clever-raise","tag-ecommerce","tag-price","tag-pricing","tag-pricing-optimization","tag-pricing-strategy","tag-repricing"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Essentials for E-commerce Pricing Optimization<\/title>\n<meta name=\"description\" content=\"Pricing optimization helps you to make better pricing decisions. On top of that, pricing optimization brings many benefits, especially when the process...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.price2spy.com\/blog\/essentials-for-e-commerce-pricing-optimization\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Essentials for E-commerce Pricing Optimization\" \/>\n<meta property=\"og:description\" content=\"Pricing optimization helps you to make better pricing decisions. 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