{"id":8682,"date":"2024-06-21T01:25:00","date_gmt":"2024-06-21T01:25:00","guid":{"rendered":"https:\/\/www.price2spy.com\/blog\/?p=8682"},"modified":"2024-09-02T14:25:53","modified_gmt":"2024-09-02T14:25:53","slug":"price-escalation","status":"publish","type":"post","link":"https:\/\/www.price2spy.com\/blog\/price-escalation\/","title":{"rendered":"Price escalation: What retailers and brands should know?"},"content":{"rendered":"\n

The more you expand your business, the more new things you need to pay attention to. One of them is price escalation<\/strong>. Price escalation means that a product may have a different price in different markets. <\/p>\n\n\n\n

Why price escalation happens and how it can be overcome are just some of the issues we will address in this post.<\/p>\n\n\n\n

What is price escalation?<\/strong><\/h2>\n\n\n\n
\"price<\/figure><\/div>\n\n\n\n

As you can probably tell, price escalation is an economic concept. The general idea behind it is that the items\u2019 prices will rise when its exported and imported into a new country (market). In such cases, the product price can vary from market to market.\u00a0<\/p>\n\n\n\n

You might think that this is similar to inflation, and you would be correct. However, the important difference here is that price escalation refers to an individual product, therefore, it doesn\u2019t have an impact on the whole market. <\/p>\n\n\n\n

Expectedly, these price changes will affect your business costs. You\u2019ll have to take into consideration additional costs such as – transportation, shipping, and storing costs, as well as different import\/export tariffs. <\/p>\n\n\n\n

Of course, if you\u2019re operating only in one country, you won\u2019t have these additional expenses. But, if you are a brand that\u2019s becoming more successful, it\u2019s natural to expand your business to other markets. You\u2019re probably aware of these additional costs, but other reasons can provoke price escalation. <\/p>\n\n\n\n

Let\u2019s check them out.<\/p>\n\n\n\n

What can cause price escalation?<\/strong><\/h2>\n\n\n\n

Besides these already familiar reasons, there are a couple of others you need to consider. If your business is operating internationally, it would be good to be covered on all fronts.<\/p>\n\n\n\n

First of all, working internationally means working with different currencies<\/strong>. That would require a strategy on its own because multi-currency can affect your pricing strategy<\/strong>. <\/p>\n\n\n\n

During the past couple of years, many brands and retailers have faced location-specific issues, mostly because of Brexit. Brexit has brought many important changes to the eCommerce sector, mostly related to VAT (value-added tax<\/a>). This trade agreement between the UK and the European Union has been stretched around for 4 years, but it finally took effect on January 1st, 2021. New VAT regulations<\/a> took place, and everyone – from business owners to price monitoring tools<\/strong> – had to adjust. <\/p>\n\n\n\n

Another thing to keep in mind is that different markets require different prices, therefore, you\u2019ll have to be careful about price escalation. Clients from different locations have different preferences, and it\u2019s not so easy to keep track of everything by yourself. Speaking in the eCommerce language, you\u2019ll have to monitor prices from location-sensitive stores<\/a>. That\u2019s usually called geographical pricing<\/strong>. <\/p>\n\n\n\n

\"escalation<\/figure><\/div>\n\n\n\n

How to overcome price escalation? <\/strong><\/h2>\n\n\n\n

There are probably many ways to solve price escalation, but we\u2019ll explain the most common ones:<\/p>\n\n\n\n