How to update pricing.
A few years back I was at a conference (remember them in the days before Zoom) on ecommerce. The speaker raised the issue updating pricing for products. One of the delegates said that this was an almost impossible task to keep pricing up to date as he had 100’s of products selling across different platforms including webstores, point of sales and direct to public. I commented that with the right system in place you could update 10’s of thousands of products, across all different ranges in minutes or automate the process so it is instant. Our friend was gob smacked and we spent quite a bit of time talking after the event going through the possibilities.
Using different software
The case in point here is that even though business’s have invested in different platforms to help make their business more competitive, they still operate old school. Business owners feel like they have to write over each price tag as if they worked at a corner store. However, this is one of the areas where a computer system can excel at. If you know your running costs and the margin you need to keep in profit, then the rest is just a mathematical equation which is what a computer designed to do. Once configured then a computer can repeat the action flawlessly. A central data base linking accounting and stock together makes it is easier to update every channel instantly. This assists in maintaining your individual customer and supplier price lists.
Using pricing to gain customer loyalty.
The variables that can affect a price of a product are many and varied which is why tracking these changes seem daunting. The most obvious is changes in a supplier’s price. If they raise their prices by a significant amount, do you just pass on that margin to the consumer? What if the consumer is not going to accept the price rise do you then look for an alternative supplier? What if the supplier price is constant but the exchange rate tanks, and sterling goes through the floor? Brexit happens and you pay more in lading fees and duty? Even if all that is constant, your price of delivery could change through a shortage in the supply chain, or you’re warehouse people need a pay rise to deal with all the extra paperwork. Each one of these factors, or a combination of them could affect whether you are running a profitable business or a loss making one.
How does DEAR systems helps with pricing.
There are a number of different systems that can measure these factors and provide solutions. Examples of this would be SAP, Sage line 200 and Oneadvanced but of the sake of our exercise I am going to demonstrate this with a program called DEAR Systems. Tahis piece of software has almost the equivalent functionality of these more expensive platforms. DEAR Systems pricing structure operates on a verly simple level but provide great flexibility. At the most basic level each product has 10 “Price tiers” which can either have literally 10 different sales prices or completely different calculations in each module. This operates like a matrix as each type of customer can be linked any of these product tiers. That means that your 10 most frequent repeat customers get the best price at “Tier 1” and the general public who buys off the street gets “tier 10”. Automatically you are leveraging pricing to your advantage by encouraging people to purchase from you often as they get a better price, where the occasional client misses out.
Next in the series we look at different pricing methods.
About the Author:
Malcolm Ford has worked is software for over 15 years and advices companies in the UK on computerising their stock requirements.
