Why do retail stores involve dynamic pricing?
Answers: With respect to the key objectives of growth and profit for any retail entity, dynamic pricing should significantly upgrade sales margins and increase sale by enabling the merchant to price variably and hence suitably and to control its product range base on profit margins. The retail stores will be able to compete more effectively near rivals in the form of mixed multiples, letters order and online retailers, who are recurrently able to undercut but who do not across the world have duplicate understanding of the retail flea market. In particular dynamic pricing is recognised as encouraging fad buys, cross-selling of products and repeat sales.
Definition: Dynamic Pricing refers to fluid pricing between the buyer and hawker, rather than the more traditional fixed pricing. Current models for dynamic pricing include auctions, reverse auctions (where buyers set the price they are prepared to pay and later sellers bid for their business), trading exchanges, price equivalent, quantity pricing, and group pricing systems.
Typically these systems will better echo the true market worth of the product involved. Examples of dynamic pricing in e-commerce today include eBay and Priceline.com.
The above is copied from the net.
My own experience at retail has be at the wholesale level.
Quantity pricing reduce the cost of some goods. The mfgs. offering these kind of promotions, are able to lessen their profit margin when volume is increased.
Buying contained by volume in this behaviour, allows a retailer to undercut competition without adjectives markup, and in some cases increase markup at alike time.
I've known "big hitters" who enjoy purchased some products by the "carload", (railroad), or "container", (as on ships).
You could name some.
The average retailer can never touch their cost factor.
Hope this answers your put somebody through the mill.