Computer keyboard [illustrative]..
(photo credit: ING IMAGE/ASAP)
Anyone buying a plane ticket for the holiday season probably has some sort of timing strategy at the back of their mind.
Consumers know that buying a ticket too close to the date can mean a significant increase in price. To help navigate the market, websites have been set up to help people determine whether it’s best to buy quickly, or wait for the price to go down.
The importance of timing online purchases is expanding far beyond plane tickets, thanks in part to an Israeli startup called Feedvisor and its competitors.
Feedvisor is the latest in a class of companies that help Amazon online retailers check markets and set their prices to maximize profits. Setting price is no easy task for companies, and involves a lot of guesswork. But with major outlets like Amazon selling hundreds of competing products all at once, it’s easy for pricing services to compare prices and figure out how high to set them.
Feedvisor takes that concept to the next level, looking at a slew of factors and changing prices accordingly in an automated system.
This November – a month that sees Israel’s online sales spike as China offers discounts for its “singles’ day” holiday and the US ramps up its “cyber Monday” discounts after Thanksgiving – that could affect a lot of Israeli consumers, for better or worse.
Unlike the past, where prices were “sticky” and unchanging for long periods of times, online shopping has allowed sellers to automatically reprice their product every 15 minutes.
Most prices don’t change by more than 2 percent to 3% per adjustment, but in the space of a day, prices can move up or down by 20% to 30%, according to Feedvisor marketing director Shmuli Goldberg. Within a month, the cost of an item can double or be halved.
The right formula for setting prices, either by lowering it to upend competitors or raising it to reflect certain advantages for which people are willing to pay a premium price, can make an enormous difference in a company’s bottom line.
The data has also helped Feedvisor pick out some interesting trends. For example, 82% of people do not choose the cheapest option available, according to Goldberg, and are willing to pay a premium price for a known seller, faster shipping time, and different delivery methods.
“People are actually less price sensitive now,” he said.
Shipping time is more important close to the holiday season, for example. People care more about good reviews on electronics, where they fear something might go wrong with an online purchase.
All that means that even Israelis have to pay closer attention to their online shopping habits from foreign websites.
Recent changes to import rules have increased the minimum amount Israelis can import for personal use from $325 to $500 before having to pay import duties.
Without good timing, price changes on the products they want to buy from Amazon could cause them to overshoot the new threshold as well.