A better pricing strategy, which organization doesn't want that? You can change a lot about your marketing mix and focus on every point of the four Ps (product, price, location, and promotion), but ultimately it is all about the right price. How do you determine the right price and ensure that your pricing strategy improves? With Dynamic prices, you anticipate the future and you optimize your pricing strategy.
But what are dynamic prices and how do you as a wholesaler ensure that your prices become dynamic? First the meaning: with dynamic prices, companies and stores continuously adjust their prices to optimize the margin on the chance of sales. With this pricing strategy, stores look for the price that consumers are willing to pay at a specific moment. This is done on the basis of many factors such as historical data, competitors, the weather, etc. How you implement this as an organization is simple. The Artificial Intelligence solution Dynamic Pricing has been developed for this. Dynamic Pricing is a mathematical formula in which a certain price is calculated on the basis of various input variables. For example, variables such as season, customer profiles, competitors and stock can be added to the mathematical formula. This also adjusts the price of the products to the size of the demand.
For many wholesalers and B2B organizations, Artificial Intelligence is still a vague concept, which is especially for the future. Yet Artificial Intelligence is becoming increasingly important for both B2B and B2C organizations and it is a real trend that companies can help in many areas. For example, Artificial Intelligence is used in many different models and solutions to, for example, predict the right and best price for your products. Many companies think that they are not yet ready to apply Artificial Intelligence in their processes, but the concept of dynamic prices is not new. Years ago, and still today, for example, airlines use dynamic prices and the prices of available aircraft seats can vary considerably per day or even per moment of the day. In the past, sales employees had to monitor and adjust prices themselves, but now a handy tool has been developed for this. Dynamic Pricing automates this process and also takes into account many factors that may be important when determining the right price.
There are a lot of companies that already use Dynamic Pricing successfully. For example, e-commerce giant Amazon is known for its use of Dynamic Pricing and also transport service Uber uses dynamic prices. In the case of Uber, the price is more expensive at the moment it is busier and therefore the company earns more for the same service. But Dynamic Pricing is also becoming increasingly important for wholesalers. This is mainly because there is still room for improvement in the field of digitization in this sector. In reality, in the current B2B environment, prices are often still executed with Excel sheets based on basic prices, standard discount lists, different quantum scales and a large number of customer-specific prices. The days of bargaining about prices in a well-defined rhythm for a period of time where the prices remain unchanged until the following deliberations have ended. This can mean that a significant part of the margin is inactive: for example, if the copper price rises, that should also apply to the price of products that contain copper. As a B2B company, not adjusting prices on time means that little or, in the worst case, no margin is left. Dynamic Pricing takes into account such developments and also adjusts prices automatically.
This will also give your organization two huge benefits:
- Save time: dynamic prices automate the calculation of millions of products. This will automate a lot of work and that will save time.
- Optimization of income, turnover and/or inventory: Dynamic Pricing takes into account the special characteristics of the B2B market and optimizes your income, turnover and sales according to a predefined pricing strategy.
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