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Dynamic Pricing for e-stores and online retailers

Dynamic Pricing is a pricing strategy in which prices are changed based on predefined rules and market conditions. Dynamic pricing (also referred to as repricing), is an increasingly frequent solution that is extremely helpful on daily basis, as well as during rush hour. More and more online stores use dynamic pricing software to fully use their margin potential – maximize profits and improve positioning on price comparison websites. This kind of pricing strategy in e-commerce is one of the most profitable and useful in the current market circumstances.

Implementing Dynamic Pricing is a must-have for every retailer that wants to stand out from competitors and attract new customers with luring prices. With machine learning-supported Dynamic Pricing strategy conquering even the most competitive landscape becomes much easier and effective. It also takes care of things like price discrimination, price elasticity, real time price adjusting and so on. Still wondering what are the pros and cons of the dynamic pricing strategy? Keep reading.


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Dynamic Pricing – who is it for and what are its benefits?

Dynamic Pricing is used particularly often by online shops that offer a wide range of products on highly competitive markets. In this kind of environment, where supply and demand can fluctuate often, pricing strategy like that is a no-brainer. Nevertheless, any vendor can implement Dynamic Pricing strategies to their own advantage – doesn’t mean what industry your business is in and what you sell, whether it’s airline tickets or electronics, you get all the good stuff with repricing system. 

Pricing automation can provide retailers with the following benefits:

  • Time savings – with pricing automation, it is no longer necessary to manually adjust all offers to the ever-changing market depending on the current demand and moves of your competition. The dynamic pricing strategy will match the prices accordingly to your prior pricing strategies & rules. You can always check the results in a transparent panel.
  • Higher profits – Dynamic Pricing strategy makes it much easier to react to any opportunities for higher profits. Sometimes, reducing the price by 1 cent can cause your product to be shown first in the ranking on the most important marketplaces, providing you with bigger profits. Pricing automation is more than just price reduction – sometimes, increasing your price can yield much better results (e.g., when the offering of your store is still the cheapest option or if the product is not available in stores of your competitors).


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How does Dynamic Pricing and repricing actually work?

  1. First, you have to determine the products for which you want to implement dynamic pricing.
  2. Then, you have to specify the rules according to which the prices are to be set (see below for some Dynamic Pricing examples). You can implement different pricing strategies and define individual rules for different product categories, sales channels and locations.
  3. Based on resources collected from the market, the pricing system (ERP systems, etc.) will propose prices for your shop. You can choose to have your prices changed automatically based on Dealavo calculations and prior Dynamic Pricing strategy rules, but you can also require that every proposed change need to be approved before it is applied to the sales channels.
  4. It is also important to follow up on the results of your pricing strategy – you might want to check if the rules you use to define the prices are optimal. You can also test various repricing rules.


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Dynamic Pricing for platforms such as Google Shopping

The Google search engine is the most powerful tool worldwide when it comes to searching for specific products. No wonder Google Shopping is the second, after Amazon, the most popular platform for customers and retailers to search, compare, buy, and sell. 

Even though Google Shopping provides price comparison features, the engine promotes products of companies that cooperate with Google Corp on a wider scale. Thus, using an independent price monitoring tool shows you the bigger and real picture of how the market actually looks like. 

Moreover, being the second most popular platform, Google Shopping is a highly competitive marketplace for retailers, especially those who just kickstarted offering their products. But it doesn’t matter whether you are an experienced merchant or a beginner – will need to respond to dynamic market changes anyway. 

There’s where Dealavo’s Dynamic Pricing algorithms come in handy. With a proper Dynamic Pricing strategy implemented, you can track prices, employ strategies, set pricing rules, and react immediately when your competitors’ offers or assortment change.

It’s important, especially when displaying offers on such competitive platforms like Google Shopping. Studies show that 40% of all online revenue comes from search engines. Without a proper pricing strategy, you lose a great chance for business growth and sales volume increase. Using Dynamic Pricing, you don’t need to worry about missing opportunities. Automated pricing makes employing tailor-fit pricing strategy trouble-free and successful. AI and machine learning to the rescue!


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Dynamic Pricing for the biggest platforms – Amazon

Amazon is now the most dominant company in the e-commerce branch having the biggest market share in the United States reaching 43% in online sales and ca. 44% of all product searches in the U.S. The platform gives a lot of opportunities when it comes to increasing sales results or gaining new clients. But the dark side is the harsh competition that might take actions and negatively influence the brand image and enterprise revenue.

Dealavo software solution for brands and retailers allows you not only to monitor prices on Amazon but also to set dynamic pricing rules to overtake your competitors. It’s not a secret that Amazon is a price-oriented platform. That is why kicking things off with tracking the prices is simply a must if you want to be a successful Amazon vendor.

Due to a double verification conducted by our Machine Learning algorithms, we guarantee to provide the highest insights quality. Moreover, Dealavo allows you to track various product pages, not only these included in BuyBox.

By setting an accurate Dynamic Pricing strategy you can control your margin and increase sales volume on Amazon easily and error-free. Try out Dealavo to implement ‘dynamic prices optimization’ in your e-store and get your prices right.


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Dynamic Pricing for eBay

With over 150 million active users, eBay is still one of the biggest marketplaces and the largest auction website. According to the statistics, eBay:

  • Offers over 1.5 billion listings
  • Generated 10.2 billion USD in revenue in 2020
  • Has over 109 million visitors each month
  • Is popular on several markets, including the US, Canada, Australia, France, Italy, Germany, and Spain.

Therefore, it’s also a good place for your business to enter. Nevertheless, you still need to remember to monitor and optimize your pricing. This way, you will ensure sufficient profit and good exposure of your listings. But that’s the role for Dealavo and its ‘dynamic prices’ feature. With implementing Dynamic Pricing strategy, you can set predefined pricing rules, e.g., for your product to be visible in TOP5 in a specific product category on eBay. And because our platform uses machine learning and AI-powered algorithms, it is all automated.


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Dynamic Pricing Software – benefits listed

When it comes to running an e-store using Dynamic Pricing software with matching pricing strategy is a must. Since there are many types of dynamic pricing plans, the range of benefits is wide as well. The Dynamic Pricing tool helps you out with:

  • identifying price fluctuations,
  • planning and implementing pricing strategies,
  • setting pricing rules,
  • price automation,
  • increasing your profit and peak pricing
  • controlling the margin,
  • price elasticity,
  • price discrimination,
  • real time adjustments,
  • value based pricing,
  • and many more…

Give it a try, and make your business grow.


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Which pricing automation rules can be used? Types of Dynamic Pricing

The rules for automatic pricing frequently depend on the nature of the particular industry, company or sales channel. And for that reason, there are many types of dynamic pricing. Below, we have provided examples of the most popular Dynamic Pricing rules:

  • TOP 3 on the particular platform – use this rule to be included among the first 3 offers in a specific sales channel, e.g., Google Shopping.
  • Between two competitors – the rule allows for automated price setting between the selected competitors.
  • Below/above selected numerical attributes – this option offers the possibility to set the target profit margin as a specific amount or percentage (e.g. the specified product price should include a margin of at least 5%).
  • Below/above selected competitors – if we use this rule, the algorithm will generate lower or higher prices than the competitor prices.
  • Increase/decrease by a specific amount/percentage – this option allows you to decrease the price by a specific amount or percentage in a specific period of time. This means that, for example, the price of a product will be reduced by PLN 1 every three days.


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Additional Pricing Automation Rules & Strategies

  • By cost – this rule is based on the “cost-plus” method.
  • Based on competitor market position – if you use this option, the prices of the products will be based on the market position of your competition. You can, for instance, set dynamic prices that will be higher than those offered by the cheapest competition.
  • Low inventory – this option is very useful with end-of-line products and clearance sales; it allows for automated prices reduction until your inventory level is low.
  • Profit optimization – AI (+machine learning) and exploration – this rule is particularly interesting. It allows you to have your prices optimised by artificial intelligence (AI). The algorithms learn from the gathered resources and set prices to the market conditions in the most optimal manner.


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Examples of Dynamic Pricing

Although it’s easy to talk about theory, let’s take a look at one of our client’s history, which is a real example of how implementing Dynamic Pricing strategy can change your business results.

One of our clients is an online shop operating on the highly competitive market of Consumer electronics goods. The Dynamic Pricing platform can optimise the prices to make sure that our customer’s products are always among the 5 cheapest available offers at Amazon, as long as the margin is not lower than a specific percentage. If this rule cannot be met, a different rule is used, ensuring that the product is not the most expensive product on the platform (in this case, too, there is a specific limit).

Initially, our client applied this rule to only one product group, using different rules for other categories. Thanks to A/B tests of repricing rules, however, the client found out that the described pricing method provided the best results, and they decided to use them for a wider range of products. Check the best tracking tools on the market.

Want prices updated every 10 minutes? See more information about dynamic pricing on our blog.


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Dynamic Pricing Examples – the case of Adrenaline.pl

Adrenaline.pl is an online sports shop, also running a chain of brick-and-mortar shops under the names of Nike & Adidas throughout Poland. Their assortment includes not only sportswear, running shoes, or sports gear but also street fashion in the broad sense. Adrenaline.pl places importance on high-quality products. Within their offer, one may find clothing made by world-class manufacturers, and their business model is based mainly on providing access to the newest collections – both online and offline.

Adrenaline.pl used Dealavo’s Dynamic Pricing software to adjust their prices on Google Shopping to competitors’ prices, and increase ROAS level. The task was not easy as the market is full of competitive retailers who want to attract new clients with low prices. Juggling between a profitable margin and sales volume has a great impact on the company’s profitability and its position in the industry.

Nevertheless, with a help of Dealavo ‘dynamic prices’ solutions, Adrenaline.pl managed to increase their ROAS by 29% within one month!


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Positive ROI First Week – the main benefits of using Dealavo

Integration with Dealavo Dynamic Pricing Platform is the kind of investment which done properly starts to pay for itself immediately. With proper dynamic pricing policy in place it’s nothing unusual that our clients see positive return on investment in the first week of the project. Thing often unheard of in the corporate world of long implementation cycles and intangible evaluation processes.

With well documented API endpoints and flexibility of our pricing and terms, the cost of implementation is marginal and risks for buyers are minimalised.

To sum up… you have to take into account that these days almost everything has its pros and cons… but that’s not the case with an accurate dynamic pricing strategy. See it for yourself and get your prices right.

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How reliable is your data?

In data collection business quality is a fundamental issue. Making decisions based on wrong data may be very costly for businesses. On the other hand putting resources into collecting, cleaning, and processing lots of intel without understanding its significance for business decisions may be extremely cost-ineffective.

In Dealavo we make sure that the resources that we provide will help our clients achieve their business goals and we can guarantee it under SLA. To make sure that you receive the quality you expect we may use 3 frameworks:

automatic data cleaning – Machine Learning and Natural Language Processing algorithms – lowest price but highest error rates
manual intel cleaning – all data points will be manually verified by our QA/Data Cleaning human operators – highest cost and highest quality
hybrid – machine learning algorithms + Human operators – acceptable quality at a competitive cost.

Take into account: At Dealavo we are very up-front about insights quality and we help you decide which solution and framework will be the best for your needs.

We don’t need Dynamic Pricing since we don’t aim to be the cheapest.

We also do not advise our customers to be the cheapest. There is much more to pricing than just being the cheapest.

Price has an important function in every business and price changes have a lot to do with it. Proper price lets you grow and maximizes your goals (be it revenue, profit, market share, or visibility). It’s important to understand that if you have a clear goal in mind then there is exactly one optimal price for every product at a given time. Every deviation from the optimal price in every moment stops you from achieving your goals in the shortest possible time.

What does Dealavo use to monitor prices?

Dealavo Price Tracking Tool monitors real time price changes using many methods. The main factors allowing price tracking are names of products, EAN codes, GTIN codes, ASIN codes, and many more.

The usage of a variety of tracking tools allows Dealavo to track prices as accurately as possible.

Does Dealavo monitor different sizes of products?

Yes, Dealavo Pricing Tool allows businesses to track different-sized products.

How often the system can update the prices in my shop according to the price rules?

Thanks to the Dynamic Pricing platform and all the collected data, our algorithm can recommend a price that will attract the client, as well as guarantee you optimal profits. The system update may occur even a few times a day, even every 10 minutes.


We ensure a successful cooperation


  • Kasia, Customer Success Manager Kasia, Customer Success Manager
    I believe that better relations with clients equal a greater success for both sides. It’s very satisfying when I can help a client to maximize his values with Dealavo and achieve his long-term goals.
  • Ola, Customer Success Ola, Customer Success
    When it comes to contact with clients, the crucial part is kindness and an individual approach – an attempt to build a strong business relationship based on the client’s needs. At Dealavo we care for our clients success, that is why we do our best to make their work easier, by providing accurate data to simplify decision making process.
  • Kasia, Customer Success Kasia, Customer Success
    In my job with clients, the most important factors are good relations and trust so I can show them the actual benefits of the cooperation. It’s hugely satisfying to implement solutions together and assist the clients with their daily work as well as their business development. It’s amazing to watch them growing.
  • Monika, Customer Success Monika, Customer Success
    The favorite part of my job is contact with people. It’s satisfying to help the clients and meet their needs. I enjoy being the client’s “voice” at Dealavo and taking care of the constant growth of our product. Happy client = happy me 🙂

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