Dynamic Product Pricing

Dynamic product pricing is a sales method that automatically responds to and adjusts product prices based on surges or lulls in customer demand.

What Is Dynamic Product Pricing?

Dynamic product pricing takes customer demand and market trends into account to adjust pricing in near real time. Take rideshare brands as an example. At times when demand for peer-to-peer rides is high, dynamic product pricing tools and apps will automatically increase prices. When that demand falls, prices likewise fall. In this way, dynamic product pricing is almost entirely dictated by supply and demand. Other products and services that frequently use dynamic product pricing include event tickets, utilities (like energy), airline tickets, or hotel bookings. In each of these cases, the demand for the product or service impacts the cost.

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