Sales prices fluctuate - we say why
Our sales prices fluctuate, sometimes several times a day, which always causes excitement among our customers. A good reason to create transparency and show that it is primarily external factors that influence our sales prices.
A classic scenario: A customer has bought a new TV.Two weeks later, she discovers that the identical model would now have been available for 10 percent cheaper. She is usually annoyed with the retailer.Even when the object of her desire was a top offer at the time of purchase and there was no sign of an imminent price reduction.She asks herself the question: Why do the sales prices fluctuate, and sometimes several times in one day?
Reducing price mechanics to supply and demand alone is not enough. Of course, supply and demand influence prices.Just think of the blocked Suez Canal in the spring of 2021, for example, which caused global demand and the prices of various consumer goods from the Far East to skyrocket within a few days.The fact that the sales prices on our webshops change constantly is due to several factors, four of which are decisive: the purchase price, availability, the prices offered by our competitors and our costs.
Availability and purchase prices influence each other reciprocally
The two most important factors are the purchase price and availability - and always as a duo, because a good price is no use if we can only procure two pieces at the conditions. The same applies to high availability at exorbitant prices.
And that's where the market comes into play: If we can buy a product from different sources, an algorithm developed specifically for this purpose decides which combination of availability and purchase price is the best fit. This is the basis for further price calculation: we are constantly reading in new data and processing it. Our system uses the data to optimize the selection of the source of supply, which is also the reason why the sales prices shoot up or down as soon as the availability and purchase price change.In addition, most products are traded in euros or dollars, which means that currency fluctuations also lead to regular price changes. Incidentally, we update the exchange rate of the European Central Bank on a daily basis.
Market and effort
The third important factor is the costs we have to charge to provide our services, which include product maintenance, purchasing, logistics, customer service, accounting, software development, services, mailing, marketing, etc. After all, these are not free.
And then there is the market price as a counterpart to the cost perspective: If the market offers a product at a certain price, the above-mentioned costs cannot be added to the price unseen. If the price of the memory card or the mixer is too high, customers will buy elsewhere.In extreme cases, this means that certain product ranges cannot be sold by any retailer on a cost-covering basis and have to be subsidized by other product ranges.
Competitors try to generate attention with low-price offers on popular products - over a longer period of time or as a temporary promotion.If this is the case, price changes are purely random from the customer's point of view. Long-term pricing, on the other hand, works rationally. It requires manufacturers and suppliers to work efficiently enough to cover their costs via the market price and thus ensure the survival of the company.
Dynamic pricing is not our style
It's important to note that we don't personalise prices, we don't change prices based on your previous purchases, because you shop with an Apple device, or because you're a man or a woman.Every visitor to our websites in every country sees exactly the same price at the same time. The same applies to Galaxus in Germany.
Pricing philosophy and corporate strategy
Our pricing philosophy is to offer our customers the best overall deal on the market. In order for Digitec Galaxus to remain healthy and stable in the future and to be able to invest in innovation, new warehouses and our employees, we also strive to make a profit as a company.
We want to communicate as transparently and fairly as possible to both customers and manufacturers, which is why we have been investing the company's profits in improving our services and expanding the company for years and will continue to do so in the future. We are convinced that this enables us to offer our customers a better shopping experience than the competition. And we want to keep it that way. That's what we're committed to every day.