Price Management

What’s the Optimal Frequency for Repricing?

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Dynamic pricing is a strategy that is especially beneficial for online retailers, but has garnered some bad press over the years. This bad press is due to outside industries like travel and entertainment. Companies in these industries often use dynamic pricing in a way that simply boosts their profits when demand increases. If implementing a dynamic pricing strategy was as one-sided as these companies made it out to be, most industries would have adopted it by now.

However, repricing your products with a dynamic pricing strategy is not so black and white. It can be tempting to constantly increase and decrease your prices in accordance with your competition, but that’s not how the cookie crumbles.There are plenty of factors retailers have to take into consideration before repricing, like frequency.

Just as there’s no such thing as eCommerce best practices because retailers have to address various needs of different groups of customers, no two retailers will have the same optimal repricing frequency. There are three different factors that go into your optimal repricing frequency: buying cycles, marketplace setting, and the competition. In order to understand your unique repricing frequency, you have to put these factors into consideration.

Buying Cycles

You need to categorize your entire assortment into different buying cycles. Some products are going to have longer consideration timelines for shoppers than others, so that is your first division between your products. Products that are typically more expensive are going to have longer buying cycles than less costly products.

Take laptops and wet wipes for example. If you’re looking to purchase wet wipes online, you’re not going to do nearly the same amount of research you would for a laptop that costs close to a thousand dollars. As a retailer, you need to put yourself in the shoes of a consumer and reprice accordingly.

Products with longer buying cycles are going to warrant less frequent price changes. This is because if a shopper is taking a couple of days to research a laptop on your site and they see the price go up, they’re going to be upset and potentially leave your store to give a competitor their business. However, if you change the price of wet wipes more frequently, odds are a customer will not notice the price increase as much as they would for a laptop.



Your marketplace setting will also have an impact on how frequently you should reprice your items. If you’re on an extremely crowded marketplace like Amazon, you have more leniency on how many times you can reprice your products. This is because shoppers on the Amazon marketplace are conditioned to frequent repricing from sellers and the retail giant alike.

Repricing frequently on the Amazon marketplace is almost a necessity. Your competitors are toe to toe with you, trying to grab the attention of the same shoppers. The close proximity warrants frequent repricing on the marketplace that hosts nearly 2 million active sellers every day for over 200 million active buyers.

If you’re selling on an independent website, you have a little less leeway in how often you can reprice your products. This is due to the less-intense competition that comes with an independent webstore. Instead of simply scrolling farther down a page to see a competitor’s’ listing, shoppers have to actively leave a site to find the same product somewhere else. And since they can come back to yours no problem, increasing the price in a small time frame will provide you with undesirable results.


Lastly, it all depends on how often your competitors are repricing. Repricing more than once a day is probably unnecessary if your competitors rarely reprice. On the flipside, if your competitors are constantly repricing and you’re keeping your prices static and stagnant, you may lose sales faster than you think.

It’s important to remember that you don’t have to change your price for every time a competitor reprices their products. This can lead to depleted margins and ravage price wars that ultimately defeat the purpose of selling online. Test your price changes every time to evaluate results and make future decisions. Otherwise, if you’re still making sales and pricing a dollar above the competition, there’s no point in changing your prices.

There are a couple of repricing rules that are mostly uniform across most retailers. The first is that it’s better to reprice less frequently than more frequently. If you constantly reprice your products, you can upset your customers and build a pricing reputation that replicates an airline’s. It’s this poor practice of repricing that gives dynamic pricing a bad name. But it’s not only bad for the consumer, it’s bad for your pricing strategy.

With every price change, you want to provide enough time to test and measure the impact that price change has on your bottom line. A lack of data for each price change defeats the purpose of dynamic pricing because you aren’t using your store and competitor data simultaneously to make informed decisions.

Obviously a fine-tuned, perfect repricing strategy is not going to just implement itself overnight. You need to measure the impact of each price change in order to optimize your strategies in the long run. Once you learn and understand your store’s optimal repricing frequency, you will be practicing dynamic pricing in the appropriate manner. How can you implement the perfect pricing strategy for your store?

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Better decisions can only come from better data.

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