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June 2021
Dynamic Pricing & Product Groups

Dynamic Pricing & Product Groups - Independence that pays off

23 June 2021Marketplaces Conversion SALES

E-commerce is all about independent online stores. However, rapidly growing marketplaces, that promise easy income, are attracting more and more merchants. In order to survive on an auction site, you have to constantly lower the prices of your products (and pay a high margin at the same time). What if we told you that there is a tool that allows you to sell products at the same price as on Allegro, and the money saved on the margin you will be able to invest in advertising? This will give you independence and allow you to build your own brand. How to do it? We' d like to introduce Dynamic Pricing & Product Groups - a new feature from IdoSell.

Sales Trap

Focusing your sales only on auction sites, may seem like a safe solution. In theory: you just need to have the products and then you can start doing business, because the platform will help you immediately reach a large number of target customers.In practice, it turns out that just appearing on an auction site is not enough, and selling in marketplaces generates a lot of costs.

Imagine you have a scarf store and you start selling on a popular site. Simultaneously you also run an e-store. You have a beautiful silk scarf in your assortment. To have a competitive offer, you list it on an auction site for 264.99 PLN. For this product, at this price, you will have to pay 12% commission for the sale (a little over 30 PLN). In addition, when shopping, customers will probably not pay attention to who they were shopping with. They were looking for a specific item, so the full range of your products is probably not going to interest them anymore. Additionally, the chances that they will return to your profile on the website are limited.

Despite appearances, opening an e-business in the marketplace is connected with significant costs and sacrifices. Setting up an account in the marketplace in free, which is why there are many sellers on the sites. The only thing you can do to stand out in this flood of offers is a very low product price and product promotion. For example, on Allegro, for five days of promotion of goods on the page of a particular section, you have to pay about 33 PLN. For 10 days of highlighting - 19 PLN. There are no more marketing tools, so you can be sure that the competition also uses them.

But first of all sale in auction services is connected with high commission for sale. Depending on the product, it is from 4 to 16 percent. In addition, merchants have to pay, for example, for items that have not been sold within a year or simply for displaying some products. In addition, services constantly engage sellers in various activities that are related to the standardization of the offer, so they do not have time to think about improving their sales channel, the possibility of reducing fees and development.

- In marketplaces, you are either the cheapest and you sell, or you are gone and no one uses your services. Marketplace is like the government, it doesn't have its money. It has as much as it takes from the sellers. It's the merchants that keep the auction sites going," Pawel Fornalski, CCO of IdoSell, said at the I Love Marketing conference.

Independence with Dynamic Pricing & Product Groups

From more than 20 years of experience, IdoSell says that having your own e-store provides stability and great opportunities for growth. Of course, we do not hide the fact that running an online store requires certain fees (e.g. subscription, implementation, tools). However, we can assure you that in the long run, independence and lack of high commissions make e-stores become autonomous and reliable businesses. At the same time, we are not saying that you should completely give up selling on Amazon or Allegro. However, it is worth running your own store and treating auction services as additional sales channels.

The e-commerce market is changing dynamically, the competition is increasing, and the sales pressure from the marketplace is more and more noticeable for merchants. This made IdoSell decide to create a module Dynamic Pricing & Product Group that makes it easy to optimize sales across channels.

What does the Dynamic Pricing & Product Groups module consist of?

The module consists of two functionalities that complement each other. We recommend that you first consider the options available within Dynamic Pricing. The options available in Dynamic Product Groups are advanced, for experienced traders. Therefore, they should be set with caution.

Dynamic Pricing module is a tool that makes it easier to maintain a specific pricing policy between your shop and the sales sites you are targeting. A skilful and conscious pricing policy may be a chance for you to strengthen the position of your shop against the competition.

Dynamic Pricing tools modify the prices of your goods accordingly. With Dynamic Pricing tools you will be able to set automatic rules for prices. This way, your offer will always be better in the shop than in the marketplace.

With the tools of Dynamic Product Groups you can go one step further. This tool uses historical data from various sales channels and allows you to optimise your online shop's offer, which is sent to Google Shopping and Facebook. With this mechanism, you can build product groups (selected by intelligent algorithms) for promotion in selected sales channels with a single click.

Note: The Dynamic Product Groups tool selects only those goods which meet certain price rules. So if most of your goods have, for example, in-store prices higher than the prices at which you sell those goods on Allegro, selecting dynamic product groups based on the "cheaper than" rule will cause your offer sent to Google Shopping (using a custom integration or to Google Ads by Idosell) and Facebook Catalog to narrow dramatically. This can result in a drop in traffic and consequently a drop in sales.