Price Optimization

Dynamic Pricing Models

Dynamic pricing models can help optimize prices in e-commerce and other industries.

Dynamic Pricing models are used in e-commerce, retail and other industries where pricing, supply and demand might change frequently. Dynamic pricing involves taking a number of input factors and then output something, typically a price. The advantages are plenty, including:

  • Optimizing prices (and sometimes discounts/rebates) according to e.g. demand, customer segments, willingness-to-pay and other relevant factors.
  • Ability to calculate thousands, or even millions, of price points as often is necessary. Here pricing management software can also help.
  • Responding quicker to changes in customers or other market forces.
  • Reducing human error
  • Reducing human eagerness to please by discounting more than necessary.

Here is an illustrative example of a dynamic pricing model:


The biggest task is associated with creating the model in the first place, and find out what parameters work for your industry and your business. But regular (every 3-6 months) updates to the rules in the model can bring additional benefits, especially in the optimisation area. Using Stratinis' expertise you can also apply advantaged techniques in the area of machine learning and artificial intelligence to achieve continuous model updating.

Stratinis is holding a webinar on June 7th, where you can also learn more about dynamic pricing models. Sign up now.




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