Nice write-up, but it hurts to see a generalized warning against dynamic pricing since that's what we provide with our product Baabedo[0] (we don't adjust prices on a per-customer level though).
One point where we observed the exact opposite effect is the splitting of shipping cost. Products with free shipping sell better than with split pricing, but that might be a marketplace specific effect of Amazon.
I'd say the dynamic pricing should be done transparently, that is, the user should know that the products have been re-priced.
It also depends very much on how you do it.
From the article:
>Is dynamic pricing always bad? Not necessarily. Dynamic pricing can be effective when adjustments are based on supply and demand (e.g., stadiums trying to fill remaining seats).
>Dynamic pricing becomes harmful when adjustments are based on a customer’s willingness to pay. You should avoid charging different prices based on past behavior, demographics, or any other factor besides natural supply and demand.
Does badbedo do re-pricing based on the positive or negative factors? From the blog it appears to be choosing optimal prices based on the market, not on the user.
> Does badbedo do re-pricing based on the positive or negative factors? From the blog it appears to be choosing optimal prices based on the market, not on the user.
Because we are currently only on Amazon we can't do optimization based on the customer because we only get information about him when a sale is made. So at the moment we optimize based on market and past sales history.
I am generally open to the idea of customer based pricing and think that it can be very powerful if done right and be benifical to both the merchant and the customer.
One point where we observed the exact opposite effect is the splitting of shipping cost. Products with free shipping sell better than with split pricing, but that might be a marketplace specific effect of Amazon.
[0] https://baabedo.com