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Why dynamic pricing pays off now

Static prices cost margin. Demand fluctuates, purchase prices move with it, competitors test daily. With dynamic pricing, you automatically control for margin, inventory pressure and competitive signals-withoutspreadsheet gymnastics. Result: more stable net margin, better position in channels and less dead inventory.

Conversie vs. prijs met optimale bandbreedte en minimummarge (illustratie dynamische pricing).

The basics: rules > underbelly

A good pricing system works with clear, explainable rules:

  • Minimum margin (hard): never below purchase × (1 + margin%).

  • Include channel costs: fees, shipping and return rates → drive by net margin per channel.

  • Curves & brand consistency: €34.90 instead of €34.87 (or whatever suits your brand).

  • Stock logic: high stock + low rotation → slight price drop; tightness → hold or slightly up.

  • Competitive bandwidth: moving along within ±x%, never below bottom.

Data points you need

  1. Purchase price + discounts (current).

  2. Channel costs (ads/marketplaces/fulfilment).

  3. Stock & rotation (days on hand).

  4. Demand/elasticity: effect of price on CTR/CR.

  5. Competition: price + delivery time (legal sources).

  6. Return impact: return ratio per SKU in your net margin.

Quick start: MVP in 5 steps

  1. Choose one category (≥50 SKUs) with stable demand.

  2. Define lower bound: purchase + margin + channel cost + return buffer (e.g., +3%).

  3. Put 3 lines live:

    • Rule A: if stock > 60 days, price -2% (respect bottom).

    • Rule B: as 3rd most expensive within your cohort, price -1% (up to bandwidth).

    • Rule C: Hero-SKUs move less; priority availability.

  4. Frequency: 1× daily for entire category; hourly deltas for top SKUs.

  5. Logging: old/new price, margin, position, CR; review after 2 weeks.

Price elasticity without rocket science

You don’t have to build a full econometric model. Start with steps:

  • Test ±1-3% price steps and log CR/sales per SKU.

  • Label 3 buckets: inelastic (CR remains), neutral, elastic (CR reacts).

  • Allow elastic SKUs to move faster; inelastic less (availability > price).

Pitfalls (and quick fixes)

  • Overreact to noise → use moving averages (7-14 days) and minimum interval between price changes.

  • Cannibalization → set max range per week (e.g. ±5%).

  • Treat all SKUs equally → distinguish hero, long-tail and bundles.

  • Ignoring delivery time → fast delivery time sometimes justifies a higher price.

KPIs that matter

  • Net margin per order (after fees & returns).

  • Buy-box/position on marketplaces (without margin damage).

  • Stock rotation (days on hand toward target).

  • Price elasticity per SKU (CR change at increments).

  • POAS/ROAS: more stable due to healthy margin buffers.

Governance: keep it manageable

  • Change budget: max number of price changes per day/SKU.

  • Approval rules: log jumps >5% and manual approval if necessary.

  • Version control: save rule sets (v1, v2) + rollback.

  • Transparency: pricing rules ≠ marketing promo; communicate clearly internally.

Niche practice

In niche shops (like our Padel cases), variant level is crucial. One size/color “out of stock” pushes the CR on the entire product. Pricing + stock logic at variant level keeps product detail healthy.

Pricing Smarter Together
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