Product price has been one of the most important factors behind any consumer’s buying decision. Today consumers are sensitive to the prices more than ever before. Quality of the product does top the list of priorities but consumers want the best deals for their choice of product. Consumers consciously look for any price variations of the same product from different retailers, whether the price is too high or too low, or if they can get a similar product from another brand. Underlining the importance of price, in terms of product comparisons, retailer preferences, and brand choices.
Therefore brands are becoming super competitive with their pricing strategies. For e-commerce, these prices change every minute. Any wrong price for a good quality product can hamper product sales, ultimately affecting profits.
Besides that product pricing plays a significant role in how consumers perceive your product. It is indicative of a product’s reputation in the market i.e., is the product premium or budget?
Ultimately price you charge for your product should generate you profit and provide you a return on investment. Finding balance and optimizing product price is one challenging task for businesses.
Challenges faced by sellers
Achieve product differentiation
When it comes down to the competitive world of e-commerce and their product listing methodologies, eBay has totally different approach than Amazon. Amazon has a catalog based platform, where the competitors are listed alongside, under the same ASIN number. Whereas eBay has an algorithm that finds the ‘Best match’ using titles, brand, MPN, UPC, and many other combination product specifications, keeping ‘top brands’ and ‘best prices’ as their priority as a search result.
This makes the sale on eBay more price-driven. Also, it becomes easier for buyers to compare the products. All the products listed show no significant difference in terms of model, MPN and UPC. So sellers try to create product differentiation by lowering their price as that of the competitor products. As a result, many sellers lose their business.
In order to curb this disadvantage, sellers can perform continuous price monitoring. But bigger the businesses the harder it is for them to continuously monitor price fluctuations manually. As a result, their best match ranking slides down, this further decreases page conversions. So if a business does not perform price monitoring on eBay it gradually loses its business. eBay with tools like eBay repricer lets businesses decide strategies to increase sales. eBay repricer automatically sets cost price against the competitors' price, whether high or low.
How AI-based repricing solution can be game-changer
AI-based repricing tools help businesses take advantage of real-time competition data. With AI algorithmic methods businesses can achieve price optimization. That will enhance their profits by keeping up with competitive prices in the market, safeguarding the margins. It can help sellers to develop niche categories and gain an additional advantage.
Since retail pricing fluctuations are fast-paced, sellers need to keep up with the changes or risk losing their business. Automation can make this process faster and react to price variance in seconds. It can fine-tune repricing to achieve that much-desired business goal.
Dynamic pricing works better when combined with competition and customer data. If your competitor is no longer giving discounts or they are out of stock, you can monetize on it by increasing your product prices momentarily. At the end up reprice would mean an increased profit, whereas down reprice would mean an increased turnover for businesses.
AI-based repricing can help businesses to better position their products in the market and increase sales. It ultimately translates into better profits for them and performs better than the competition.
Published by Eric Foley