Top 7 reasons to implement price monitoring into your sales strategy

“If you do not know at what prices your competitors sell, you are giving them your profit.”

— Jonathan Lawrence, pricing expert

In a highly competitive market of online stores and suppliers, a well-thought-out pricing strategy becomes one of the key success factors. Competitor price monitoring not only helps you stay within market bounds but also actively influences business profit and competitiveness. Let’s consider five main reasons why price monitoring is not just a tool but a strategic necessity.

Content List

• How to increase profit without losing customers
• Get ahead of competitors: real-time pricing
• How to protect yourself from dumping and price wars
• Accurate pricing strategy: how not to lose money
• Mistakes that cost businesses too much
• Increasing the density of the supplier’s products on the storefront
• How to get rid of illiquid goods and free up capital
• Conclusion

1. How to increase profit without losing customers

For online stores

Price monitoring allows you to quickly adapt your pricing policy to the market situation. If the price of a product is higher than that of competitors, the likelihood of purchase drops sharply. This has been proven many times. However, blindly lowering the price without analysis can lead to unjustified losses. Using data on competitors’ prices helps find the optimal balance between price attractiveness and income level. As Jonathan Lawrence states:

“Companies that regularly analyze competitors’ prices can more accurately forecast demand and manage markup.”

This is especially important for highly competitive niches such as electronics or clothing.

According to a McKinsey & Company study, companies using dynamic pricing increase profits by an average of 2-5%.

For suppliers

Monitoring prices among dealers and online stores prevents dumping and protects the brand from unjustified cost reductions. As sales analyst Maria Phelps notes:

“Maintaining stable prices in the long term strengthens partners’ trust and preserves market positions.” This is especially important in conditions of fierce competition and the fight for customer loyalty.

2. Get ahead of competitors: real-time pricing

For online stores

Regular price monitoring allows you to stay at the top of search results in marketplaces and price aggregators. Modern customers compare offers in real time, so timely price adjustments provide a competitive advantage. According to Lawrence:

“Companies that ignore competitors’ prices risk losing up to 30% of potential customers.”

For suppliers

Price monitoring helps assess the brand’s market position. If competitors reduce the price, it may signal a need to adjust your marketing strategy or look for new sales channels. According to a Boston Consulting Group study:

Companies using competitive analytics are 15% more likely to maintain their market positions.

3. How to protect yourself from dumping and price wars

For online stores

Some market players use dumping as a strategy to attract customers. However, this leads to reduced profit margins and makes it impossible to conduct business in the long term. Monitoring allows you to identify aggressive price manipulations by competitors and respond promptly. Maria Phelps claims:

“Companies that engage in price wars rarely emerge as winners. It’s important to find a balance.”

For suppliers

Tracking prices among partners prevents a situation where one dealer starts selling goods below the recommended price, undermining the overall market and unfairly diverting the profit of other participants. This helps maintain stability and equal competition conditions among partners.

4. Accurate pricing strategy: how not to lose money

For online stores

Data on competitors’ prices helps develop a flexible pricing system that takes into account demand, seasonality, and competitor activity. This increases the effectiveness of marketing campaigns and boosts conversion. According to Harvard Business Review:

“Proper pricing allows you to extract maximum profit with minimal customer loss.”

For suppliers

Price analysis allows suppliers to develop distribution strategies, adjust recommended retail prices, and manage discount programs more effectively.

A Harvard Business Review study showed that companies investing in strategic pricing increase their revenue by 8-10%.

5. Mistakes that cost businesses too much

Companies that do not use price monitoring face the following problems:

• Loss of customers due to non-competitive prices.
• Low profit margin due to chaotic pricing.
• Reputational risks due to uncontrolled dumping.
• Lack of clear understanding of the market situation.

Companies that use price monitoring have the opportunity to adapt their strategy in real time and increase their competitiveness.

6. Increasing the density of the supplier’s products on the storefront

For suppliers

Price monitoring is used not only to track prices among dealers and online stores but also to analyze the assortment of your own products on their platforms. The more supplier products represented in an online store’s catalog, the higher the storefront density, which increases the chances of a purchase.

By using monitoring, suppliers can determine which products are underrepresented or missing from key partners. For example, if only part of a product line is presented in an online store’s assortment, this may reduce overall brand sales. As sales analyst Maria Phelps points out:

“Companies that control not only prices but also the representation of their products on partners’ storefronts occupy more stable market positions.”

Thanks to such data, suppliers can respond in a timely manner to a shortage of items, negotiate with retailers to expand their assortment, and increase the competitiveness of their brand.

7. How to get rid of illiquid goods and free up capital

For online stores and suppliers

Every business has products that sit in the warehouse for months or even years. They don’t sell, take up space, and “freeze” the company’s money. The main reason is an uncompetitive price. Many entrepreneurs try to solve this problem with sales, but without analyzing competitor prices, such discounts may prove ineffective.

Price monitoring makes it possible to determine whether the high cost is truly hindering sales or if the issue lies elsewhere: insufficient visibility on marketplaces, outdated descriptions, or low demand. If a competitor offers a similar product at a lower price, it’s important to adjust your price before the product becomes completely unsellable.

A McKinsey & Company study shows that a 10-15% price adjustment can speed up the sale of illiquid goods by 25-40%.

In addition, price monitoring helps identify patterns: which goods most often “sit around” and why. This enables online stores to avoid purchasing unsaleable items, and suppliers to adjust their assortment and offer partners better terms to clear out stagnant inventory.

Conclusion

Price monitoring is not just a tool but a strategic necessity for successful business operations. Using competitor price data allows online stores and suppliers to increase profits, minimize risks, and remain competitive.

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