How does Dynamic Pricing work?

For each offer that has Dynamic Pricing enabled, our system will determine the price range - that is, minimum price, standard price and maximum price. For Dynamic Pricing to work, the minimum price is required as the lowest acceptable selling price.

Once the price range is set, the system will adjust the result selling price to the current competition.

Methods of setting the price range

1. Cost based range - for offers that are linked to products with a specified product cost, the system will calculate the minimum, standard and maximum price (optional) based on the product cost and mark-up (i.e. intended to make a profit), courier cost, additional costs, VAT rate, and sales-related fees.
2. Fixed range - if the offer is linked to a product without a specified product cost, it will not be possible to calculate price ranges based on all costs. In this case, you can specify the price range manually - it is required to specify at least the fixed minimum price. Optionally, you can specify a fixed maximum price. It is not possible to specify a fixed standard price - if the offer has no competition its resulting selling price will be the minimum price.
3. Mixed range - if a cost based price range is possible for an offer and in addition a fixed minimum price (and optionally a fixed maximum price) is given, the system will choose which prices will be applied. It will always choose a higher minimum price (between the cost-based price and the fixed minimum price) and a lower maximum price. The standard price can be set only on the basis of costs.

What causes recalculation of price ranges

• changes of the global price settings for offers that use the default settings (that is, for a given parameter they do not have individual settings),
• change of the global VAT rate for the country of the offer market for offers linked with products that use the default VAT rate (that is, they do not have an individual VAT rate set for the country of the offer market),
• change of the individual VAT rate for a product linked to an offer,
• change of the cost of a product linked to a given offer. Adding a product cost will calculate a cost price range, which will begin to be used in determining the resulting selling price,
• change the currency exchange rate for all offers for which the system calculates the cost price range (i.e., those that have the product cost added) and the base currency is different from the offer's market currency. Exchange rates are downloaded for each business day from the NBP and ECB. Price parameters that require conversion to another currency are updated automatically once a day (we do this at night so that in the morning prices are determined taking into account the latest available official currency exchange rate).

Determining the result selling price in relation to the competition

1. Once the price range is set, the system will match the result selling price with the current competition for your offer.
2. Your offer has no competition (price competition status ONLY) - the resulting selling price will be:

• a standard price if there is a cost based or mixed price range,
• the minimum price if there is a fixed price range,
• the minimum price of your offer is lower than the lowest price of the competition (BEST price competition status) - the resulting selling price will be set in relation to the lowest price of the competition according to the difference setting from the competition,
• the minimum price of your listing is higher than the lowest price of the competition (price competition status POOR) - the resulting selling price will be set at the level of the minimum price to give it the best chance to sell.

How is the selling price adjusted to competition

In order for the system to set the result selling price based on competition it is necessary to specify at least a percentage difference from the competition:

• percent difference from the competition - the percentage given will be related to the price adjustment range. The price adjustment range ro the difference between the lowest price of the competition and the minimum price of a given offer. For an offer with a minimum price of 8 EUR and the lowest price of the competition of 10 EUR, this range will be 10 EUR - 8 EUR = 2 EUR. If we set the % difference from the competition as 10% it will mean that your price is to be lower than the price of the competition by 10% * 2 EUR that is 0,20 EUR. In this case, the resulting selling price will be set as 10 EUR - 0.20 EUR = 9.80 EUR.  Setting the parameter % difference from the competition as 0% will set the resulting selling price equal to the lowest price of the competition. On the other hand, 100% will mean that the resulting selling price will always be set equal to the minimum price,
• amount difference from the competition (expressed in the currency of the marketplace) - for an offer in BEST status, the resulting selling price will be set by subtracting this value from the lowest price of the competition (of course, with the rule that you cannot set a price lower than its minimum price),
• if both parameters are given, the system will choose the one that results in a lower value of the difference from the competition (and thus a higher resulting selling price).