What is a price tracker and how does it work?
Have you ever wondered what a price tracker is, and how it automates work with dynamic pricing? Well, after reading this article you’ll know everything about how price trackers work and what the advantages and disadvantages are. But first, let’s dive into the first question: what is a price tracker?
What is a price tracker?
Let’s start with a definition of a price tracker. Since there is no Wikipedia page that tells us what a price tracker is, we’ve decided to come up with a definition. 🙂
A price tracker is a tool to track, compare, and analyze prices from websites.
I know, there’s still something to unpack here. So, let’s go!
The difference between a price tracker for B2B and a price tracker for consumers
First, I think it’s important to explain the difference between a price tracker and a price comparison website.
We all buy stuff online. Sometimes we buy from an online store or marketplace. Sometimes, before we buy, we visit a price comparison website like Google Shopping, Price Grabber and others for dynamic pricing analysis. These websites focus on offering the end buyer the best deal. That is not what we mean by a price tracker. Although the technical elements behind these websites are almost the same as competitor price trackers, the application is very different.
A price tracker is a technical solution that helps (online) retailers, wholesalers, and manufacturers track prices of competitors and dealers. It makes the process of tracking prices easier and less painful, and it also gives information to make pricing decisions.
Technical: how does a price tracker work?
Ok, let’s get a bit techy. If you’re not interested in the technical aspect of price trackers, feel free to scroll down, where you will find more about the commercial application of pricing trackers.
Everyone knows that Google scans your website to rank you in the Google search results. A price tracker works in a similar way.
Example: Google scans your URL, Page Title, image alt text, texts and then decides what the page or website is about. Based on this content, Google will give you a certain position in the search engine.
The first step of the price tracking process is the same: a price tracker scans a certain website and focuses on the product title, price and stock. Some price trackers do even more: they scan product descriptions, reviews, images and other relevant information as well. The second step is different. While Google uses this information to rank your website in the search engine, a price tracker will store the collected information in a database. The user of a price tracker can see this information on a dashboard or in a list lay-out, just like Excel, but usually more advanced.
People often think that it is easy to create a price tracker; off course, when you focus on a specific website, you can create one spider. But imagine creating a price tracker that needs to crawl hundreds of different websites, analyse all the products several times a day, and store all that data in a database. From a development perspective, it is wise to choose an existing price tracker that has already tackled all these issues. It will save you countless hours of developing custom code, which is already available for, in most cases, an affordable subscription fee.
Commercial: what are the benefits of using a price tracker?
Let’s assume that you are responsible for online sales. Of course, you want to increase sales and profit margins. But where do you start in today’s competitive landscape?
Every retailer knows that prices do matter. The lowest price isn’t a guarantee for success or even the best strategy per se, but most buyers consider the price as one of the most critical buying reasons. Therefore, as an online retailer, you should be aware of your competitors’ costs, stock and margins and offer your buyers an appropriate price. However, keeping track of all these prices and data can be a tedious process. And that’s where a price tracker comes in.
With a price tracker, a retailer can focus on the core tasks of running a business. Instead of manually searching and piling up Excel sheets, you simply use a price tracker to do the heavy lifting. Most price trackers are available for less than €100,- a month, which, in most cases, is way less than the labor costs that come with doing price tracking and market research manually. Moreover, it’s way more accurate.
By having the right prices, you increase the chances of selling big time.
A no-brainer: a good pricing tracker saves you a lot of time because it automatically maps the market and, if it has a dynamic pricing feature, it automatically adjusts your prices to the current market environment.
It’s a misconception that the primary purpose of a price tracker is to lower your prices. It’s not! You don’t have to lower your prices, a pricetracker gives you the insights that you need to formulate a solid pricing strategy to make calculated decisions. That means upping your prices, thus increasing your margins, if the opportunities are there!
Ever heard of MAP? Minimum Advertised Pricing?
Being a manufacturer, you are proud of your products. But, sometimes, it is a pity to have to rely on resellers and dealers. Especially when they decide to drop the price of your products. Low prices can be harmful to your brand. Therefore, you want to have the right tools to monitor how your resellers and dealers are pricing their/ your products.
You can do this manually but, off course, you are too busy with important stuff to keep track of your dealers and resellers.
Price tracker for marketplaces
It’s no secret that marketplaces are the winners of today’s eCommerce playing field. Amazon (US), Idealo (Germany), Bol.com (The Netherlands), etc. are good examples of marketplaces that offer retailers a platform to sell their stuff. But how do you keep track of the prices of marketplace sellers? Well, the more advanced price trackers also offer marketplace pricing trackers.
The scraping technique for marketplace price trackers works the same as for ‘regular’ online stores. However, the way the pricing information is displayed might be slightly different.
In Pricesearch, we offer our users a different view of marketplace results. After all, on the product page of a regular online store, there is always one price per single item. At a marketplace, there are usually different sellers for one single product, generally at different rates. For example, you can buy this Nike sneaker at Amazon from 5 different sellers, all for a different price. There is always a winner (that’s the seller who has the buy box), but there are various sellers for different products that still have a chance at making the sale.
If you compare the Nike shoe above with the Nike shoe below, you’ll see there is a difference in pricing, product information, photo’s, etc. Who do you think gets the Buy Box? Although the product above has almost three times as many reviews, the Nike shoe below will get the Buy Box because of the better pricing.
For that reason, we created a specific marketplace view, where you can easily see how many different sellers offer a specific product, what the different prices are, what their review score is, and how many products these sellers offer. If you are (also) selling on marketplaces, this will give you the necessary insights to develop a pricing strategy that increases your chances of winning the buy box.
Price tracker and repricing / dynamic pricing
Having insights into your competitors (or dealers’) prices is a good starting point, but in some cases, you need extra automation: dynamic pricing, also known as repricing. With dynamic pricing, you not only automate the process of tracking prices, your prices will also be adjusted automatically based on your competitors’ prices.
Does this mean the dynamic pricing functionality will always reduce your price, whenever a competitor drops the price? No, fortunately not. That would be a problem, wouldn’t it be? You are totally in charge of the price adjustments by creating pricing rules. These are parameters you can set that the dynamic pricing automation cannot go beyond. For example, if you set a minimum price or a minimum margin, the dynamic pricing feature cannot go below that number. This means you will not sell at a loss if you don’t want to. Examples of dynamic pricing rules:
“If [X] is [Y] then [Z] except [X] is [P]”.
For example: “If [product A of competitor A] is [€X] then [offer A for €X-5%] except [when product A of competitor A] is [€Y or lower]”.
A price tracker can be seen as both a productivity tool and an intelligence tool. To improve your productivity and prevent a lot of manual work, most price trackers offer an integration with your eCommerce platform, such as Shopify, Lightspeed, Magento, Shopware, and WooCommerce. Sometimes additional software or extensions are required to create a connection with the price tracker. The most popular eCommerce platforms have access to a (REST) API, which makes it easy to connect your platform with the price tracker. When you have a custom-made platform, you can connect with the price tracker via their API.
The extra benefit of using an integration is that the price tracker software can, via the dynamic pricing feature, automatically adjust prices on your eCommerce platform based on real time data is has acquired. Also, it keeps track of price changes and new or deleted products.
Another benefit of a price tracker is that you can create listeners on specific events, for example with tools like Zapier. When a tool detects a price drop or a price up, it can automatically send a message to Zapier.
What are the cons of using a price tracker?
A price tracker has a lot to offer. But are there downsides?
We think there is one because, as with all great technologies, in the end the user must keep an eye on it. We believe that a price tracker should be part of the toolbox of marketers, pricing analysts, and other eCommerce and retail professionals. But don’t fall into the trap of thinking: “Now we have a tool for tracking prices, so we never have to look at our prices again.”
Trust the technology but keep your hands on the wheel. Having a price tracker in place doesn’t mean that you don’t have to work on your pricing strategy. Instead, take advantage of the newly acquired data and insights and keep improving.
Don’t focus on dynamic pricing alone: keep improving other parts of your business to give your customers the best experience possible. By only focusing on your pricing, you might create a blind spot for all other important areas that you could improve. Keep that in mind. Too much focus on your pricing will make you forget about other growth areas.
How do you get started with a price tracker?
Setting up a price tracker is fairly easy and straight forward. We hope you’ll choose Pricesearch and we’ll follow the setup process for this tool:
- Select your tool of preference;
- Create an account (you can try 14 days for free);
- Upload products:
- Via an import
- Via one of our integrations (Magento, Lightspeed, Shopify, etc.);
- Add your EAN codes (so Pricesearch can start scraping);
- Add your competitors (to help Pricesearch start faster);
- Set up your dynamic pricing rules, and you’re all set.
Hopefully this article helped you to get a good idea of what a price tracker is and how it works. Who knows, perhaps we have convinced you to start saving time and selling more. If you have any questions, make sure you let us know!