What factors does Amazon use in its dynamic pricing?Īmazon’s dynamic pricing strategy is a closely guarded secret. On the highest discount dates like Prime Day, Black Fridayand Cyber Monday, you can easily identify a good deal, or if the price increased before the discount was applied. There are already price trackers that allow them to compare the best historical price of the product that interests them and find out when might be a good time to buy. Users are fully aware that they can make their purchases at optimal times with better prices.Īmazon customers know that prices vary, and they also care about how they work.
The fact that their changing pricing strategy is known to everyone is one of the values that makes them so outstanding for their users. Why is Amazon’s dynamic pricing successful?Īmazon is one of the best rated online stores by consumers, both for usability and customer satisfaction. Expert Tip: Maximum profit for your business is found by defining the balance between the best price and the sales ratio you will get with it. In this way, it manages to be the cheapest and stays in control of its profit margin. However, it does this gradually to achieve maximum profitability based on the sales forecast.
Without a shadow of a doubt, these figures reflect the company’s refined dynamic pricing strategy.Īccording to a 2018 study by Minderest, Amazon may alter product prices by up to 20% when its competitors offer promotions or discounts. Imagine how large the groups established in their dynamic pricing strategy would need to be to create the correct relationships between variables, and the different parameters taken into account when changing prices. Its catalogue comprises a trifling 400 million products. Amazon makes an average of 2.5 million changes a day.
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