To understand the Role of Dynamic pricing policies for the growth of e-commerce we first need to understand the concept of dynamic pricing. Although this concept is pretty not much applied in retail marketing apart from holes and airlines industry, still e-commerce giant like Amazon has played it safe for years. 

What is dynamic pricing?

The Dynamic pricing policy adheres to the notion of economics where the price of a product depends upon its demand and supply in the market. With product market being flooded with homogenous items it somehow became challenging to bring the dynamic of pricing into play since customers could replace their demand.

With the ever-growing market of ecommerce the probability of having dynamic pricing could become a reality and help grow the business too.  That’s means products that are high on demand with short supply can have premium pricing.

Here are five unusual strategies to grow your ecommerce business using dynamic pricing:

  1. Customer pricing: Now, this can be tricky but worth the work. Putting your existing customers and those that buy from you even at a full price above those anonymous customers who must look at the product and never return could be a good idea. Giving your privileged customers more discount or offers and showing the regular price to others is a good start.

  2. Demand-based on popularity: Watching closely over the reputation of a product and tracking its demand can be of great use to dynamic pricing. Like brands are not build in a day p, but ones a customer recognizes a brand, it stays loyal. Items that are very popular have a sudden surge in their demand, and hence supply can be met using dynamic pricing.

  3. Price based on time:  The time-based pricing trick is pretty old but still of great use for growth of ecommerce. Timing it right with dynamic pricing is an excellent strategy. Like festivals, occasions, seasons even weekends can become a favorite shopping time. Sales are high with dynamic pricing policy during the festive season, and it's all about timing it right.

  4. Fresh/ new arrival: When new stock is launched, its the best time for some premium pricing for those loyal customers looking for fresh from a brand. Also, pre-orders or booking orders before launch can be high for pricing it right. The entire idea behind pre-launch is to provide customers with exclusivity, and customers love this VIP treatment.

  5. Be competition ready: When facing the competition, although some may not like it it’s better to race till end than to quit midway. At least that’s how I feel. So, pricing to the least you can may at least help clear your inventory rather than selling them at a loss. When tied up with severe competition, such sale prices can be a step to rescues your business.

Well, these where five tried and tested methods that can, not only help you grow the ecommerce business but aid to sustain it in crisis. Remember the key towards playing the dynamic pricing policy right, is using it at the right time and for the right audience.  

Published by Jason Roy