You need the best competitor price monitoring tools to help you secure the highest margins without losing sales–but how do you choose?
Price monitoring tools or price tracking software is the only way to keep up to the modern speed of [pricing] information.
We know you know.
But we don’t know how much you know. So…
In this post, we introduce competitor price monitoring, the benefits of price tracking, and how to find the best tools for you.
What is competitor price monitoring?
Competitor price monitoring, also known as price intelligence, is the gathering and analysis of historical and real-time competitor prices to optimize your pricing strategy.
Why do you need to monitor competitor pricing?
Let’s say that you want to sell something on Amazon. How do you set a price low enough to be competitive yet high enough to profit?
The sweet spot is where you maximize the total profit. For pricing a product in the market, it’s a balance between affordability and profit margin–setting a product’s price too high may lower sales, while setting it too low may lose profits.
So, you need to monitor competitor pricing to find the sweet spot, which is where you find your maximum profits.
How do you even find the price sweet spot?
You can mark up your total supply chain costs until you satisfy your business goals to get a vague idea. If that marked-up price is what people are paying on average, you’ve found a sweet spot.
But the price of anything fluctuates–and so does the sweet spot.
Do I have to monitor and change prices all the time?
No, you don’t have to.
However, you may lose customers if a competitor begins to offer discounts. Or, you may risk selling yourself–your inventory–short.
How can your competitor even offer lower prices–did they find a way to reduce overhead on shipping or manufacturing?
Well, you would be in the loop if you were monitoring the changing prices in your supply chain.
You should probably get on that. But how?
While we can’t recommend manually copying and pasting competitor rates on a spreadsheet every morning–you’ve got the right idea.
But it’s much more convenient to hire some code to do it all for you.
What are competitor price monitoring tools?
Competitor price monitoring tools are software programs that help you monitor global competitor price movements. It allows brands and retailers to gain real-time insights into competitor prices, promotions, stock availability, and other datasets you can use to optimize pricing strategy. It also helps you understand how competitor pricing affects your sales and how well your products compete.
There are two general types of competitor price monitoring tools–web scrapers and price tracking APIs. Both are software programs that automatically monitor and analyze target information from competitor websites.
What’s a web scraping tool?
A web scraping tool is computer software that you program to collect specific datasets from websites automatically. While you may need to be code-savvy to operate some web scraping tools to any successful degree, web scraping APIs are accessible to anyone in a short amount of time.
Web scraping tools are the most cost-efficient for small and medium-sized businesses or those with a smaller budget. The learning curve can be longer because you may have to decide what data to scrape and how you can use it in your price strategy. Therefore, web scraping is better for those with some background in data science or data collection.
Besides price monitoring, you can also use a web scraping tool in lead generation, risk management, academic research, and market analysis–across many industries, including real estate, automotive, cryptocurrency, etc.
You can only use price tracking APIs for e-commerce, so web scraping tools are a more flexible option.
What’s a price tracking API?
Price tracking APIs are similar to web scraping APIs, except they are made specifically for monitoring and tracking prices in the e-commerce industry. They usually offer a selection of monthly plans that cater to different business sizes.
You don’t have to think nearly as much while using a price tracking API. The higher cost for this software buys you the convenience of simply typing in your parameters and pressing the track button.
What are competitor price monitoring tools capable of?
Whether you choose to use web scrapers or price trackers, automating price discovery is a must to keep up with the market. These tools will keep you up to speed, but they also generate the only authority you can trust–data–and lots of it.
- Offer the most competitive real-time prices
- Take stock of your competitor’s inventory and update your merchandise accordingly
- Compare your prices to competitor prices
- Leverage historical data to make accurate demand predictions
- Monitor competitor price movements across global e-commerce marketplaces and websites
- Review and audit your pricing strategy with actionable and highly accurate data
- Automate your pricing strategy for fast and intelligent pricing decisions
- Compare prices for branded and private label SKUs across your competitor landscape and instantly match them
- Improve your product listings for better visibility and higher conversions
- Easily manage prices during market movements and competitor stock-outs
How to choose the best competitor price monitoring software.
When choosing a web scraping tool, you will want to find out what computer language works best for you, what technical skills you need, and how well they integrate with any other software you use–like a proxy management system. You can learn more here.
If you’re going for a price tracking API instead, here is what to look for:
Competitor price monitoring
An essential feature any price monitoring software should have is automatically monitoring price movements of products across your competitors in real-time and presenting it to you in a simple, easy-to-understand dashboard.
Accurate product matching
Your price monitoring tool needs intelligent matching capabilities with a high accuracy rate for accurate product and price matching. It should be able to match similar and exact products for both branded and private-label goods– ensuring that your products compare accurately against similar competitor products for a complete price profile of your competitors.
Apart from price monitoring, an essential aspect of intelligent pricing software is to review competitor products with other parameters like product visibility, product descriptions, customer reviews, bestsellers, etc.
Historical price data
It is vital to find a pricing solution that can give you a complete historical analysis of product and price movements. By having a comprehensive historical view of online catalogs, you can track stock movement and effectively determine when to replenish stock, product launch timing, and the ideal prices and promotions.
Pricing software should be able to identify similar products with different terminology and standardize descriptions in a category tree. This will ensure a systematic and standardized method of identifying and analyzing matching products without missing out on products with alternate definitions. The software should also help you segment product prices across different categories like product type, brand names, custom tags, function, etc.
Stock movement visibility
Intelligent pricing software should track competitor stock movements, in-and-out-of-stock products, and product demand. This information can help you plan your pricing and promotions strategies. You can increase prices for out-of-stock products at competitor sites, reduce costs of in-demand products, and make the most of competitor stock-outs.
If you’re wondering how else you make leverage online data, check out our post on how to make money with web scrapers.