Price Optimization Software Need: Remember the good old days when things were simple? When pricing a product was a straightforward affair? The distributor would arrive at the store with the merchandise and let them know what is the recommended retail price for every product.
The recommended retail price was fixed, normally X2.2 the price the distributor was charging the store for the product. The price the distributor was charging the store was X2 what it paid for the manufacturer. That’s a high margin come to think of it. Without the distributor products could have been sold at half the price, but how can a shoemaker from Italy reach dozens of stores in London personally?
Price Optimization Software
With online retailing, the cards have been completely reshuffled. The shoemaker can now open an online store and sell directly to the consumers all around the world, with very simple logistics. Did it make stuff cheaper since the distributor is out of the loop? No. Do manufacturers pocket a double profit now when they sell directly? They sure do.
But for a reason. Because their products are still being sold in third-party stores and they need to keep a fixed price of their products across all channels. If they would sell their products on half the price on their own online store, third-party sites would stop carrying their products since nobody would buy it.
So even though we were on the brink of slashing all prices of all products by half, it didn’t happen. At least now we can be happy for small manufacturers that they make decent money. The pressure has shifted from manufacturers to retailers, especially online retailers – it is now them that carry the heaviest burden of competition.
Consumers Are Very Price Conscious
Online pricing has become immensely complex, and competitive. Not only consumers can conduct a very efficient, and quick, research on the product before they buy it, there are also countless sites that are devoted to price comparisons. Retailers can’t hide anymore behind marketing slogans. Their pricing is now front and center.
All this is done in real time, from smartphones, sometimes even when the consumer is inside a physical store.
Time to Optimize Your Pricing Strategy
So once the first step is completed – getting potential shoppers to your online store, you need to present the right price. The right price isn’t always the lowest price, and that’s where UpstreamCommerce’s retail price optimization comes into play. As the name suggests, UpstreamCommerce has developed a highly advanced algorithm to conclude the optimal price for every one of your products.
The advantage of having your pricing done by software is that prices are dynamic. Meaning, they are being updated in real time, all the time. There are no more fixed prices. Depending on the season, demand and availability, even the time of day, online prices are flexible.
One of the main factors UpstreamCommerce’s price optimization software takes into account in determining prices is how your competitors are pricing identical products. This comes to answer exactly the scenario we mentioned above, of price comparison sites and shoppers actively searching online for the best deal.
The software crawls your competitors’ web shops and gathers pricing intelligence of the products that are similar to yours, analyzing the entire market situation and recommends you the best prices for each product. It also gives you a constant view of how your competitors are pricing, so you can reach educated and precise decisions regarding your pricing strategy.
Adapt and Stay Dynamic in Your Pricing
Online presence is now of immense importance for online retailers. It’s not enough to offer good prices, online shop owners need to ensure they appear high in relevant search results on Google, because that’s where many shoppers begin their research. Many retailers hire now external experts to help them in that, like the Tel Aviv based SEO agency traffic. SEO agencies know how to target specific products and niches according to the retailers’ business.
In today’s high-paced, highly competitive online retail market smaller retailers must adapt the strategies and technologies of big-box retailers in order to stay in the game. Since the internet made location irrelevant, and selection infinite, pricing has become crucial decision-makers for shoppers.
Having a price optimization software/solution great helps online retailers maximize their profit potential, while SEO strengthens their online presence to ensure they are visible and have traffic directed at their online shops.