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In this episode, Philip and Rob take a look at how eCommerce companies inadvertently fix their prices. Plus the team examines the causes of price fixing and how you can avoid them.

Hosts: Philip Huthwaite (CEO & Founder of BlackCurve) and Rob Horton (Product Director at BlackCurve).

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🎧 Available to listen now on all major podcasting platforms.

🎧 Available to listen now on Apple.

🎧 Available to listen now on Spotify.

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Full Episode

Podcast Summary

Introduction

Philip Huthwaite and Dr. Rob Horton host the podcast episode, discussing the concept of price fixing in the e-commerce industry. They emphasise the importance of understanding and avoiding unintentional price fixing in pricing strategies.

Definition of Price Fixing

Price fixing is explained as the collusion between competitors to set fixed prices or manipulate market conditions. It involves agreements among market participants to buy or sell products at predetermined prices, disregarding the natural relationship between supply and demand.

Examples of Price Fixing

The hosts provide an example of a business that was fined for colluding with a rival to avoid undercutting each other's prices on Amazon. This highlights the negative consequences of price fixing and the need for fair competition in the marketplace.

Unintentional Price Fixing through Repricing Strategies

The hosts discuss unintentional or accidental price fixing, which can occur when businesses rely solely on basic repricing strategies driven by competitors' prices. Automated repricing tools scrape data from the web and adjust prices accordingly, often resulting in businesses unknowingly fixing their prices based on their competitors' moves.

The Risks and Inefficiencies of Unintentional Price Fixing

The hosts highlight the risks and inefficiencies of unintentional price fixing. By solely focusing on competitors' prices, businesses may ignore other market forces, such as supply, demand, and optimization of profitability. This can lead to an artificial race to the bottom, where prices decrease without considering the value offered to consumers or the business's bottom line.

Moving Beyond Basic Repricing Strategies

The hosts advocate for businesses to adopt more sophisticated pricing approaches and technologies. They stress the importance of considering multiple data sets, including supply, demand, and market conditions, to make informed pricing decisions. By moving beyond basic repricing strategies and embracing comprehensive pricing technologies, businesses can avoid unintentional price fixing and achieve better outcomes.

Cultural Shift in Pricing Strategies

The hosts discuss the need for a cultural shift in pricing strategies. They encourage businesses to look inwardly, focus on what they can control, and utilize pricing as a lever for growth and profitability. By understanding market dynamics, considering a wider range of market factors, and making strategic pricing decisions, businesses can avoid unintentional price fixing and deliver value to consumers while maximizing profitability.

Conclusion

In conclusion, the hosts emphasize the importance of businesses critically evaluating their pricing strategies and adopting more sophisticated pricing technologies. They highlight the need to consider a wider range of market factors and make informed pricing decisions to avoid unintentional price fixing. By doing so, businesses can drive growth, deliver value to consumers, and optimize their bottom line.

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