Variable pricing refers to a pricing strategy in which the price of a product or service changes based on various factors, such as supply and demand, competition, and cost of production. This approach is used to optimize revenue and profits by setting prices that are in line with market conditions.
Some common examples of variable pricing include:
- Dynamic pricing in e-commerce, where prices change in real-time based on supply and demand
- Seasonal pricing, where prices change based on the time of year
- Geographic pricing, where prices vary based on location
- Volume pricing, where the more a customer buys, the lower the price per unit
Variable pricing can be an effective way to increase revenue and profits, but it requires careful consideration of market conditions, customer preferences, and the cost of production.