Automated Pricing & Repricing: the new trump card for successful e-tailers
In 2021, selling on the internet is now within everyone's reach. The result is a situation where e-tailers are legion and it is difficult to differentiate your offers from the competition. At the same time, carriers, suppliers, taxes, etc. have also become so diverse, depending on the product, that it's difficult to know what price to set for each product in order to make consistent margins.
These problems, which are detrimental to the sales and profitability of e-tailers, are nevertheless easy to resolve. Software to automate pricing and repricing is all you need to overcome them. In 8 minutes, let us show you how Pricing & Repricing solutions play a crucial role in the strategy of successful e-tailers.
What are pricing and repricing solutions?
Let's start with the basics. Before talking about Pricing and Repricing software, let's define these terms. They are both Anglicisms. Pricing refers to the process of thinking about setting the price of items. Repricing refers to the process of changing prices to make yourself more attractive in your market. Pricing and Repricing solutions automate and perfect these techniques.
Pricing software will integrate all your costs to calculate the cost price of your items, then determine the selling price, according to the margin you want. With pricing software, the prices you set are always in line with your sales targets.
What's more, if you need to change supplier for some of your products at a later date, or if a tax increases, etc., all you have to do is update the relevant field and your product catalogue will be updated automatically. This saves a huge amount of time in managing your business.
Using pricing software ensures that you never sell at a loss or with an insufficient margin. This is a much more common problem than you might think, because when you have a catalogue with hundreds of items in it, it's hard to keep it up to date with prices that are always consistent.
Repricing software will enable you to differentiate your products by price. As we explained in the introduction, competition is so fierce in e-commerce that it's not uncommon to find your products drowning in a sea of offers. Whether you want to sell for more, less, etc., if you have thousands of products or even just dozens, you can be sure that competitors will outbid you and make your offer less visible. Even if you put in the time, it's hard to keep a pricing strategy afloat in e-commerce.
Repricing software solves the problem by automating the implementation of your pricing strategy. It will ask you to set pricing rules for your products in advance.
For example, "I want the price of my products to always be €1 below the lowest competing offer". The software will then check on your sales channels that your prices are correctly positioned in relation to the competition. If your prices do not comply with the rules you have set, the software will update them.
With repricing software, you can be sure that no competitor or new entrant will disrupt your pricing strategy. This means that your products will always stand out from the rest. What's more, since this is done automatically, you don't have to make any effort.
And don't forget that repricing software can check prices several hundred times a day on all your sales channels. Even if your competitors decided to change the prices of their bestsellers several times a day to keep the lowest offer, you would surpass them within minutes.
Repricing software allows you to indicate the minimum margin you want to achieve on the cost price of your products. The minimum margin will serve as a reference for the repricing software so that it does not go below a certain price. It takes precedence over the pricing rules.
It is therefore impossible for the automation of your pricing strategy to result in a loss of money.
To sum up, with Pricing and Repricing software :
- You increase your margins, because you always sell at the right price.
- You increase your sales, because your offers are more attractive.
- You eliminate loss-making sales from your business.
The repricing solution, a tool that's particularly well suited to today's e-commerce ecosystem
A repricing solution is essential for today's e-merchant. It provides invaluable support for healthy growth in today's e-commerce ecosystem. In 2020, the UNCTAD (United Nations Conference on Trade and Development) has stated that 62% of online sales will be concentrated on marketplaces1.
Marketplaces are sales platforms, an online equivalent of shopping malls, where a large number of professionals can simultaneously sell their products. Competition is omnipresent. A repricing tool is therefore essential to differentiate your products. What's more, most marketplaces are governed by the "buy box" system. Repricing solutions are particularly well suited to taking advantage of this.
The term "buy box" refers to the offer featured on marketplaces' product sheets. If you want to sell a games console and there are several of you selling this item, the marketplace will highlight the most relevant offer to the detriment of the others. This privileged space is what constitutes the "buy box". Here's a demonstration linked to our example, on Amazon.
The price in red, €269 99, refers to the offer highlighted by Amazon. If you look a little lower, you'll find offers from other sellers.
No matter which marketplace you sell on, if you get the buybox, you'll sell far more than your competitors.
There are several reasons why a repricing solution can help you get there. Firstly, because it allows you to easily obtain more attractive prices than your competitors. This is a major criterion for winning the buybox on all the marketplaces, if not the only one on certain marketplaces, such as Rakuten.
Secondly, a repricing solution will help you win the buybox, as it is a fantastic competitive intelligence tool. To compare your prices with those of your competitors and reprice your products, repricing solutions retrieve certain data from your competitors on the marketplaces. They can make this data available to you. This way you can find out whether your competitors have better ratings, delivery times, etc., and improve your offer accordingly to win the buybox and increase your sales .
Gathering information about the competition also allows you to identify fraudulent competitors. For example, you may find that competitors are selling at a lower price than you, but that their product and/or service is disastrous. If this is the case, you can increase your selling price without risking losing a large number of customers. You will also be able to identify the marketplaces that favour their products for the buybox, so you can avoid modifying your offer for buyboxes that you will never win.
Tools that must continue to evolve to meet the requirements of tomorrow's e-tailers
Pricing and repricing solutions are still evolving. A host of changes are taking place, or will take place, in the e-commerce world. Most of them relate to the evolution of the marketplaces sector. The best suppliers of repricing solutions are already working to respond.
The first major change is the emergence of tools for creating your own marketplace. Today, thanks to Mirakl, retailers in all sectors are able to create their own BtoC marketplaces on a reasonable budget. Major companies such as Fnac Darty and Leroy Merlin are already taking advantage.
Given the phenomenal growth2 of marketplaces (+81% growth by 2020), it's almost a given that the trend towards creating your own marketplace will increase for companies that dominate the retail sector in which they operate. For repricing solutions, it will therefore be essential to be compatible with the marketplaces published by Mirakl, and then the serious competitors that will emerge, to meet the needs of all e-tailers.
The second major change underway in the marketplace world is the rise of Google Shopping. Google Shopping is not strictly speaking a marketplace, but it works like one. This Google Inc. site integrates the offerings of e-tailers, with the special feature of making them appear in the results of its search engine.
Unlike most other marketplaces, you have to pay for the right to sell your products on Google Shopping. Despite the costs involved, more and more e-merchants are using Google Shopping because of the high visibility and ROI it brings. It is therefore essential to be able to offer a Repricing service for this growing offering in order to satisfy all e-tailers.
Boostmyshop is at the cutting edge of innovation and technology, offering a repricing solution, myPricing, which is fully compatible with Google Shopping and Mirakl marketplaces.
myPricing is constantly evolving to establish itself as the most innovative and comprehensive repricing solution. The next steps include compatibility with BtoB marketplaces created via publishers such as Wizaplace and the integration of AI into the operation of the algorithms.
So a word of advice: now and in the future, keep up to date with all the latest developments in pricing and repricing tools!
1 https://www.openstring.io/marketplaces-ecommerce-monde/
2 https://www.lsa-conso.fr/81-de-croissance-pour-les-marketplaces-en-2 020-selon mirakl,374523
Article translated from French