Dynamic pricing is the practice of changing prices on products to respond to consumer demand.
The practice has been around for some time with Amazon being the most famous of the retailers that use a demand pricing strategy, also known as surge pricing.
Major retailers that range from brick-and-mortar sales to airline ticket prices use this pricing strategy in order to respond to demand for a product and rapidly increase or lower the price of a product in response.
Surge pricing is something that e-commerce sites of all sizes can take advantage of in order to maximize profits and purchase more stock going forward.
It also gives you more flexibility in controlling inventories, allows you to offer better pricing to your customers, and determine the best price point for a product.
On the surface, this sounds like price manipulation, something that's illegal as a general rule.
The fact is, a dynamic pricing strategy is legal and a valid pricing strategy that helps you sell inventory at different product prices and at different periods in time.
The burden of making the purchase is on the customer, as they always have the right to refuse the price in the form of not making a purchase. Read on to learn more about how dynamic pricing works and how to implement it for your e-commerce venture.