What Are Some Examples of Dynamic Pricing?
From the recruiting sector to Uber, here are four answers to the question, “What are the best examples of dynamic pricing?”
- Customizable Recruiting Contracts
- Amazon’s Strategy
- Airline Ticket Pricing
- Public Transport
Customizable Recruiting Contracts
Dynamic pricing isn’t just about products; it applies to services too. I’m seeing it in the recruiting sector more and more these days: that coveted contract that every firm wants may negotiate a very different deal than the standard rate.
As a small business in the industry, this feels like a natural progression. I run a boutique recruiting firm that specializes in a customizable experience, so it makes sense to extend that flexibility to my pricing model.
And it benefits me in the long term. Cutting profits on a short-term basis might mean landing a comprehensive relationship with a valuable client—one that will pay dividends in the future.
Linn Atiyeh
CEO, Bemana
Amazon’s Strategy
Amazon adjusts prices in real time based on various factors, including demand, supply, competitor prices, and customer behavior. The company has been gambling on dynamic pricing since its global expansion in 2012. As Amazon is the biggest Internet giant, it’s easy to guess that the strategy works.
Let me provide a few examples to illustrate how Amazon uses dynamic pricing. If a particular product is in high demand, Amazon may increase its price to maximize profits. On the other hand, if the demand is low, they can lower the price to boost sales.
The company also monitors the prices of competitors’ products and adjusts its prices accordingly. Additionally, customers who frequently buy certain products are likely to get a discount from Amazon, which encourages repeat purchases.
Agata Szczepanek
Community Manager, LiveCareer
Airline Ticket Pricing
One example of dynamic pricing is airline ticket pricing. Airlines use dynamic pricing to adjust the cost of a flight based on various factors, such as the time of year, demand for the flight, and the number of available seats.
For example, during peak travel season, the demand for flights increases, and airlines may increase the cost of a flight to capitalize on this demand. Alternatively, if there are many unsold seats close to the departure date, airlines may lower the price of a ticket to encourage bookings. This pricing strategy allows airlines to optimize revenue and maximize profits based on changing market conditions.
Jason Moss
President and Co-founder, Moss Technologies
Public Transport
Surge pricing, used by “public transport” types of services such as Uber or trains, is one example of dynamic pricing. Price hikes for rides at times of high demand, such as rush hour or during special events, encourage more drivers to operate their vehicles, balancing supply and demand.
In contrast, prices drop when there is less demand in order to draw in more riders. According to many variables, like the number of drivers available, the number of passengers requesting rides, and the time of day, this flexible pricing technique is intended to alter the price in real time.
Jay Kingman
Founder, Aniko Branding
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