However, prices that change every day, hour or even per minute are only possible since recently. The prices of fruit in the supermarket also change depending on the season. If done correctly, the optimal price can be presented to customers at any given moment in time. Instead of offering fixed prices, prices can vary (between a certain pre-defined range if required). The relevant factors can vary based upon the industry of specific business challenges. This is all done automatically with software that automatically responds when changes happen in the previous mentioned factors. The dynamic pricing model does not only factor in supply and demand at a given price, but also other factors, such as the prices of competitors, cost, seasonality or other factors. At this pricepoint one offers a price for which the supply will sell out exactly. This pricepoint is sometimes refered to as the equilibrium. It does so by offering a price that matches the demand curve and the supply curve, to not leave any room for additional profit margin on the table. On one hand a dynamic pricing model optimizes margins and on the other hand sales opportunities. However, due to the advancements in technology, dynamic pricing is available for more and more businesess. Until recently this was not available for a lot of companies. Dynamic pricing is a relatively new concept and practice. This process automates mundane pricing adjustments by pricing managers and enables them to spend more time working on more complex challenges and tasks. Most of the time, this is done automatically by smart software and algorithms. With a dynamic pricing strategy, companies constantly adjust prices to maximize margins, conversion and profit.
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