New technology unique to local dynamic commerce provider, SalesBid allows companies to 'scout' the market environment to track changes based on variables such as competitor prices, exchange rates, availability and time to expiration and automatically adjust the price of products accordingly. Dubbed 'Spot Pricing', the technology is expected to appeal to companies looking to optimally price their products and services online.
David Bloch, CEO of SalesBid - the company which conceptualised and developed the new technology - explains how the new formula can benefit companies. "A pricing formula is developed based on a number of variables which have an impact on the price of a company's goods. If any of the variables change, the technology registers these changes and the formula, unique to the company in question, automatically adjusts the prices in line with these changes. This makes it an extremely effective revenue management tool allowing companies to get the best price for products at any given time, taking into account all relevant pricing factors."
Bloch says that the model is highly flexible and can link to internal data, such as quantity of stock available or internal yield management systems; as well as external variables via remote data collection. The process of collecting remote data involves an agent 'fetching' a number of variables from other sites and sources. This feature can be used effectively to track currencies, stock prices, gold and other fluctuating prices in real time. The ability to track competitors' prices is also a powerful feature of the system.
He says that local and international interest has been overwhelming. "It is of interest to any business or industry seeking to maximise the prices at which it can sell its products and services.
"For example, an airline may want the price of its seats to fluctuate automatically in line with demand. So seats may start off at R500 when a flight is relatively empty, rise to R1000 as the flight becomes fuller and then drop to R750 in order to fill the last remaining seats on a flight. Since prices of different products are driven by different factors, SalesBid works closely with its clients to establish appropriate formulas based on variables specific to their business and the changes in price would happen electronically through these formulas," says Bloch.
"Another great application could be a retailer running a promotion or special offer for a limited quantity or period of time. They may want the first x% of customers to get a lower price for early purchase and then the next x% of customers to get a slightly higher price and so on. The price would adjust automatically during the course of the promotion as pre-determined in the spot pricing formula."
While spot pricing fits well within the fast growing dynamic pricing arena, it differs fundamentally from online auctions and haggling because users don't bid or negotiate on the price of products. "While spot pricing appears to be just a fixed price from the consumers point of view, the price actually reflects the 'going price' of the product at a particular point in time. Therefore, this price could change each time a user visits a website, if the variables or parameters set for that product have changed.
"Unlike auctions which run for a pre-determined period of time, spot pricing has the added advantage of offering buyers instant gratification - once a buyer decides the price being offered is right he or she simply clicks on the 'buy now' icon and concludes the purchase."
Fixed pricing has been the traditional pricing method used in commerce, the opportunities presented by the internet now challenge this list-price method and instead allow market conditions to be accounted for in determining true prices. "Dynamic pricing is going to play a major role in the growth of e-commerce", says Bloch. "SalesBid is therefore continually researching and developing new applicable dynamic pricing models that can help companies improve the sourcing and selling side of their business, thereby improving efficiencies and optimising revenue". The SalesBid framework is highly sophisticated and flexible and therefore the spot pricing model does not only have to be used as a web-based application, but can also be utilised as an internal pricing tool.
Today's announcement follows SalesBid's recent successful launch of real-time online haggling technology with Protea Hotels and iafrica - also a first for South Africa.
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SalesBid
SalesBid is a provider of rapidly deployed, customised and affordable dynamic commerce e-business applications. It focuses on providing clients with innovative selling, procurement and enterprise solutions aimed at optimising revenue and improving efficiencies.
SalesBid's cutting edge technology allows a dynamic pricing component to be quickly and easily added to companies' websites facilitating online sourcing or selling with the aim of optimising revenue. SaleBid's online solutions are unique in that they allow companies to run dynamic pricing solutions from their own sites, thereby maintaining their business's corporate image and brand and increasing traffic to their site. Furthermore, SalesBid's superior syndication technology facilitates the items for sale to be simultaneously published on major portal and specialist sites, which exposes the participating companies^1 goods and services to a large and targeted online audience resulting in increased sales.
SalesBid is an independent subsidiary of Auction Alliance Holdings with stakes also held by management and African Harvest Capital.