Getting your pricing right is a major success factor for e-commerce businesses. But finding the “sweet spot” requires the right tools — especially those that monitor online offers for the same product. The algorithms behind these solutions, sometimes powered by artificial intelligence, truly show their value here. The goal isn’t to spark a price war, but to manage your pricing intelligently. In this context, dynamic pricing lets you align with your most relevant competitors while preserving — or even improving — your margins. Here’s our step-by-step guide to implementing a successful dynamic pricing strategy.
Step 1: Define Your Strategy
The first step in implementing dynamic pricing is to clarify your objectives. Why do you want to adjust your prices in real time? The reasons may vary depending on your market position, business strategy, and current challenges (such as the arrival of a new competitor).
Here are a few typical goals to consider:
- Increase margins: If your goal is to maximize profits, you may want to adjust your prices to capture higher margins on specific products.
- Always be the cheapest: Want to be known as the low-price leader? Dynamic pricing allows you to monitor competitor prices in real time and ensure you offer the most competitive pricing—without cutting too deep into your margins.
- Avoid losing sales: If your priority is to remain competitive without necessarily being the cheapest, dynamic pricing can help you retain market share by staying in the game.
- Boost sales volume: If you're aiming to grow your revenue, adjusting your prices based on demand fluctuations or running targeted discounts during key moments (promotions, clearance periods, low season, etc.) can help you reach that goal.
- Optimize your Google Ads budget: A well-defined dynamic pricing strategy can also improve your paid advertising ROI. By syncing your pricing with Google Ads, you increase the chances of conversions by promoting offers that are well-positioned to drive clicks and sales.
- Clear out inventory: If you need to move stock quickly—for example, to make room for seasonal items or new arrivals—dynamic pricing can help by adjusting prices based on available inventory.
Once your objectives are defined, you’ll need to decide which products to include in your dynamic pricing strategy. You can adopt a broad approach, adjusting prices across your entire catalog, or take a more focused strategy—targeting high-volume or high-margin products where price adjustments will have the most impact.
Step 2: Prepare the Groundwork
After outlining your strategy, the next step is to prepare your data and tools for implementation.
Start by identifying where your key data lives—prices, inventory levels, sales history, purchase costs—and how to feed this information into your repricing tool. Then, clarify who is responsible for managing this data: is it your tech team, category managers, or sales department?
Next, plan how data will flow into the tool. Several import methods are available, from simple Excel uploads via SFTP to automated data feeds. Feeds are the most efficient method, enabling continuous and automatic syncing between your CRM and repricing system, ensuring your price data stays up to date.
Consider how adjusted prices will be managed. Will you export them in Excel for manual review before applying changes? Or will you use an API to fully automate the process or enable manual validation via API before updates are pushed live?
Also, think about how insights will be shared and with whom. While Excel exports are still viable, a user-friendly online dashboard is far more effective for your marketing or commercial teams. It enables real-time visibility into prices and recommendations, helping them make faster and more informed decisions.
Step 3: Build Your Rules
Now it’s time to build the rules that will guide your dynamic pricing — the success of your strategy depends on their relevance and consistency.
The first decision is whether to harmonize prices across all sales channels or differentiate them. For example, applying the same price on every site may work for premium brands that want to maintain a consistent image and positioning. Alternatively, you may choose to tailor your prices based on the characteristics of each platform. Marketplaces often come with added fees that may justify slightly higher prices. Some platforms also cater to different customer segments, allowing for pricing adjustments based on their buying behavior.
The next consideration is how you position yourself against competitors. You can choose to align your price exactly with that of your closest rival — this helps you stay competitive without triggering a price war. Another strategy is to always be slightly cheaper (e.g., €1 lower than your competitor). This can attract bargain-focused buyers while still protecting your margins. Finally, decide whether you want full automation or manual validation for each price update.
Be careful not to confuse repricing rules with margin rules. Margin rules define a minimum selling price to ensure profitability, and they typically take priority to protect you from selling at a loss. By structuring margin and repricing rules together, you can optimize in real time without compromising profitability. You can prioritize and combine as many rules as needed, allowing for great flexibility.
This level of granularity allows you to tailor pricing strategies to each product. For instance, premium brands can support higher margins, while entry-level items may require more frequent promotions. You can also configure rules to account for shipping costs, ongoing promotions, or specific competitor behaviors. This customization lets you fine-tune pricing and improve profitability on a product-by-product basis.
Finally, identify who your real competitors are. Not every seller is relevant for your pricing strategy. Don't forget to include marketplaces like Amazon, Cdiscount, or eBay, which often have very different pricing dynamics than standalone websites. Deciding whether to include or exclude these platforms from your comparisons can significantly affect your strategy.
Step 4: Choose the Right Dynamic Pricing Tool
All that remains is to compare available solutions on the market to find the ideal dynamic pricing tool. Pay close attention to the quality and quantity of product matchings. The ability of the algorithms to correctly identify relevant matches is critical. Make sure the provider you choose has an internal quality team that manually validates matchings based on product attributes (not just EAN codes). Otherwise, you risk inaccurate matchings that can skew your repricing results and strategy. To be sure, run tests!
Also, consider the frequency of price updates, the availability of local-language support (is it in French?), the level of tool customization, and the overall feature set (email alerts, Chrome extension, historical tracking, BI and analytics, etc.).
Our solution, Price Observatory, automatically tracks your competitors’ prices in real time. We monitor e-commerce sites, marketplaces, and price comparison platforms on your behalf. Thanks to our constantly evolving algorithms, products are matched using multiple criteria and verified by our in-house quality team. Prices are collected and updated daily.
With Price Observatory, you’ll quickly get to grips with our intuitive pricing analysis interface, and our real-time alerts ensure you stay responsive—allowing you to optimize your margins and sell more effectively.