I’ve talked about pricing on Cutting for Business before (see this post), but today I’m going in a different direction related to pricing. As soon as Halloween is over in a few weeks, big box retailers will start pushing their Christmas and winter holiday products. The period of time from the beginning of November to Christmas is the busiest time of the year for Silhouette small business owners. Silhouette business owners can take advantage of this busy time to increase revenue by using dynamic pricing instead of static pricing.
Basic Definitions of Static and Dynamic Pricing
Static Pricing – A price is determined and the price stays at a set rate the entire time a product is for sale.
Dynamic Pricing – Prices fluctuate based on the demand of the product.
Real Life Examples of Dynamic Pricing
In our everyday lives, we are surrounded by dynamic pricing.
Hotels – As the amount of rooms available for certain days decrease, the prices for the remaining rooms are increased.
Airfare – As seats on planes fill up, the pricing for the remaining seats are increased.
Sporting Events – The more in-demand a sporting event is, the higher the price for tickets (World Series, Superbowl, or Stanley Cup)
How to Use Dynamic Pricing in Your Silhouette Business
There are two easy ways to apply dynamic pricing to your Silhouette business.
- If you sell holiday products throughout the year, you raise the prices when the holiday is closer. For example, let’s pretend I sell Christmas decor in my Etsy shop year round. I might sell a Christmas themed wooden sign for $30 in June; while the same sign might be priced at $50 in December when more buyers are searching for Christmas themed wooden signs.
- If you have products that would make good holiday gifts, raise the prices during the peak holiday shopping time. For example, a personalized item that sells for $10 throughout the year could be priced at $15 during November and December.
After the holiday rush is over, you decrease your prices because the demand will be lower.
The Benefits of Dynamic Pricing
Obviously, the benefit of dynamic pricing is that you increase revenue and profits by raising the prices during the right times. The change is quick and easy in your Etsy shop or online store, and no other details with your product changes. I call that a win for Silhouette small business owners! Do you think you will try dynamic pricing during the upcoming holiday season? Let me know in the comments.