Successful online retailer ReplaceBase approached Prestanda with an interesting problem: is there a way to automatically set product prices based on recent sales and stock data?
Over time, it had become an incredibly labour intensive task for the team at ReplaceBase to set product prices across a growing product catalog – at the time of this project there were just over 12,000 products in their range. Their two main options were less than perfect:
- Set pricing manually per product, which was out of the question for reasons of labour intensity
- Set pricing with blanket profit margins in mind, which was better but only went to category level at best
With a products that range in price from pennies to thousands of pounds per unit, a better solution was necessary.
Prestanda worked closely with ReplaceBase to generate an algorithm which takes into account multiple product specific metrics (including units sold, number of orders, stock levels, latest product cost) to generate an ideal margin range for each product. From there the software will increase or decrease a product's price based on the movement of the combination of those metrics.
Very exciting and a huge pressure off me worrying about pricing, including to help get overpriced stock moving. Very pleased, you have done a fantastic job.
Steve Garner, ReplaceBase
There are allowances within the system to alert the ReplaceBase team when a product may need manual review, as well as options for the team to exclude specific products from the automatic repricing – allowing them control over which products they want to keep a closer personal eye on.
The outcome of this work is that each product in the catalog ends up with a price that is as close to perfect as possible for a given set of market conditions, increasing both revenue and profit margins for the client.