The advantages of pricing automation

The advantages of pricing automation

01/24/2023 - Price optimization

Automated pricing involves using software to set prices, based on variables of significance to the store. These tools manage prices automatically to ensure they are as optimized as possible, and constantly adapt to the real-life online market. The importance of automated pricing tools lies in the fact that pricing has proved to be a complicated process. Without them, the process requires a human team to consider multiple data, such as competitors’ prices, consumer preferences, or variations in supply and demand. This can require significant time and human resource investment. On the other hand, pricing automation software analyses millions of proprietary and market data and almost instantly recommends the best prices. We explain how it works and the main advantages.

Higher profitability and more accurate prediction of competitors’ movements 

Introducing pricing automation software in an e-commerce business delivers time savings and optimized decision-making. Setting prices based on key information about the market and users, makes it possible to increase the profit margin and maintain it despite price changes. You will better understand how your prices will work at any given moment and how competitors are expected to act. This is especially useful in times of inflation, like now. 

At the same time, pricing automation software speeds up new product launches, where pricing is critical to their success or failure. Pricing suites analyse the same, similar, or complementary products already on the market, and their sales channels, to recommend the best price. 

Constant price optimization 

One of the greatest advantages of pricing automation is that it constantly adapts to the company’s needs. Regular reviews of supply and demand will help ensure the implementation of any necessary price adjustments, so that prices remain attractive and profitable. Sales managers can monitor these changes to ensure they comply with the company’s strategy. This will require much less time than would be spent manually changing prices.

Advantages of pricing automation

How to implement pricing automation in your e-commerce business 

To ensure automated pricing delivers optimal profitability, you need to: 


  • Define a pricing strategy: The direction the company intends to go with its prices determines the strategy. A few examples of effective pricing strategies are:


  • Competitive Pricing: Pricing that is lower, equal to, or higher than the competition. 
  • Penetration Pricing: Setting a very low price for a newly launched product onto the market. 
  • Prestige Pricing: High prices for higher-quality items or products targeted at an audience with a higher willingness to pay. 


  • Identify the main competitors in each sales category to accurately define the search criteria for the pricing software to follow.

Guided by dynamic pricing rules, the most advanced tools can help you implement pricing automation in your company and start enjoying the benefits. Software with cutting-edge technology, such as Reactev, has been shown to boost sales and increase profitability.

Category: Price optimization

Tags: pricing

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Maria Jose Guerrero
Content Manager

The first dynamic pricing solution designed by and for retailers