Price war can’t be avoided when selling online where your prices are transparent and everyone can see it. Due to this, you can only achieve sales but low on profits or high on profits but less sales.
However, you can still win the price war and achieve sales targets and maximize profits at the same time by using Dynamic Pricing strategy.
What is Dynamic Pricing?
The product prices set by a seller varies daily where it may be up or down to match the market conditions and response to competitors’ prices.
You can gain an advantage by following prices of competitors or lower than them while ensuring prices are not lower than profit margin. You can also gain an advantage by increasing prices when competitors are out of stock. Thus, maximizing profit at the right time to gain more profits.
Dynamic Pricing strategy can be utilized automatically or manually. However, manually may require much more work than automation as you have to monitor competitors’ prices daily.
Imagine if you have to hire staff to trace links in order to monitor prices. A staff can only trace maximum 600 links in 8 hours if only there is no other interruption during work.
There are many human factors that may affect the amount of links traced;
- Annual leaves and emergency leaves etc.
- Fatigue due to too many links
- Boredom caused by repetition
- Human errors which caused data to be inaccurate
Tracing manually will have inconsistent results and be costly.
The staff may be able to trace 600 links a day but on another day he may only trace 300 links which is half of the result but they are still getting the same salary.
Let’s say if hiring a staff to trace links is RM2,000 per month and you have to hire 5 staff to trace all the links, it would cost you RM10,000 per month and they do not work on weekends and public holidays.
However, if you were to utilize price monitoring software such as Lazyworm which is fully automated.
Why is Lazyworm better than hiring a staff to achieve Dynamic Pricing;
- Tracing same amount of links consistently
- No staff management problem
- Labour cost reduced
- Fast and accurate data and results
- Record competitors’ historical prices
- Work everyday, no leaves etc
Lazyworm is able to generate multiple reports such as a report where you can see all products' prices.
In the manual process, you have to monitor prices daily or you hire someone else to do it to know what are the daily prices competitors set. Repeating the same process everyday may cause unproductivity.
But Lazyworm can perform a better job and also solve all human problems. You do not have to hire people to monitor prices daily and not having to worry about your staff leaving.
Thus, Lazyworm works much more efficiently and productively compared to a human.
The table below is a comparison of a single software vs a human:
| Lazyworm | Human | |
|---|---|---|
| SKU | 1,000 | 600 |
| Number of Similar Product | 10 | 10 |
| Total Link Track | 10,000 | 6,000 |
| Cost | RM999/month | At least RM1800 per month + EPF + SOCSO |
| Weekend & Public Holiday | Still Working | On Leave |
| Cost of Staff Benefits | None | Pay Leave, Annual Leave, etc |
| Error of Data | None | Human Error |
| Management Cost | ||
| Speed of Generating Report | Less than 10 seconds | Depends on Performance |
From what we can see on the table, Lazyworm is much more cost-saving compared to a human as it only costs RM999 per month and provides better performance, less staff management problems and work everyday.
Humans may cost more than RM2,000 but have many factors that may affect their performance which causes inconsistency.
Lazyworm is made to help you achieve your sales target with full utilization of dynamic pricing. Cost will be at minimum yet achieving good results and sales targets as well as maximizing profits.