pricing pitfalls

5 E-Commerce Pricing Pitfalls to Avoid: Lessons from Industry Leaders

Embarking on the e-commerce journey entails more than just selling products online; it’s a dynamic dance of strategy and precision. Setting the right prices is crucial for businesses, but it can be tricky. This quick read explores the mistakes made by industry leaders in pricing and reveals the common pitfalls to avoid. Discover how advanced pricing software can be a reliable guide for e-commerce success.

Pricing Pitfall 1: Overlooking Competitive Pricing Dynamics

Mistake: Setting prices in isolation without considering competitors’ strategies.

Solution: Use pricing software to conduct real-time competitive analysis. Identify optimal pricing points based on market trends, competitor pricing, and customer behavior.

Leveraging advanced pricing software can provide a powerful solution by enabling real-time competitive analysis. Such software uses sophisticated algorithms to gather and analyze data on competitors’ product pricing and market trends.

By incorporating pricing software you gain the ability to dynamically adjust prices based on the rules that you set compared to your competitors. For instance, when a competitor raises their prices by 20%, your prices will automatically rise or lower accordingly. This ensures that your pricing remains competitive and responsive to changes in the market environment.

Software can automatically collect and process data from various sources, offering valuable insights into competitor pricing, promotional activities, and customer preferences.

Furthermore, pricing software can assist in scenario analysis, allowing you to simulate the potential impact of different pricing strategies before implementation. This proactive approach enables you to anticipate market reactions and fine-tune your pricing strategy accordingly.

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Pricing Pitfall 2: Ignoring Seasonal and Demand Fluctuations

Mistake: Failing to adjust prices during peak seasons or when demand fluctuates.

Solution: Leverage pricing software that incorporates dynamic pricing algorithms and can prepare your campaigns for you. Automatically adapt prices based on seasonal trends, demand spikes, and inventory levels.

By incorporating dynamic pricing algorithms, businesses can ensure that their pricing strategy aligns with the ebb and flow of market demand. Software analyzes real-time data, considering factors such as historical sales patterns, competitor pricing, and current inventory levels. This information is then used to optimize prices, maximizing revenue during peak seasons and preventing overstock situations during periods of lower demand.

Furthermore, pricing software allows for the creation of customized pricing rules based on specific business objectives. It can factor in external variables such as holidays, promotional events, or industry trends to fine-tune pricing strategies. This flexibility ensures that pricing decisions are aligned with both short-term market conditions and long-term business goals.

Pricing Pitfall 3: Discounting Without Strategy

Mistake: Providing discounts without considering the impact on profit margins or long-term customer perceptions.

Solution: Use software to analyze the effects of discounts on profitability. Implement strategic discounting based on customer segments, purchase history, and promotional goals.

Adopt a strategic approach to discounting that takes into account both short-term sales goals and long-term profitability. Pricing software can help identify the most effective discounting strategies for your products, ensuring that discounts are targeted and align with overall business objectives.

Moreover, pricing software can assist in setting discount thresholds and limits to prevent excessive discounting that might negatively impact profitability. In addition, some software can even help you simulate the most optimal discount percentage for your products according to historical data and market changes.

Why machine learning and AI are the future of product pricing?

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Pricing Pitfall 4: Manual and Time-Consuming Pricing Processes

Mistake: Relying on manual processes for pricing updates, leading to errors and inefficiencies.

Solution: Adopt pricing software that automates routine tasks. Ensure seamless updates, reduce errors, and free up time for strategic decision-making.

By automating pricing updates, businesses can eliminate the risk of human errors that may occur during manual data entry or calculation. Software can handle repetitive tasks efficiently, reducing the likelihood of pricing discrepancies and ensuring that updates are executed accurately and consistently.

Additionally, the automation provided by software enables you and your teams to focus on strategic decision-making rather than getting bogged down by routine operational tasks. This shift in focus can lead to more thoughtful and data-driven pricing strategies, ultimately contributing to improved business performance and competitiveness.

Pricing Pitfall 5: Lack of Pricing Transparency

Mistake: Failing to communicate pricing changes clearly to customers and neglecting legal and regulatory considerations in pricing.

Solution: Display real-time price adjustments and provide explanations to build trust with customers. Stay informed about industry regulations and ensure your pricing practices align with legal requirements.

To address the challenge of unclear communication, businesses should leverage pricing software designed to facilitate transparent communication with customers. This software can display real-time price adjustments and provide detailed explanations for changes, fostering trust and understanding.

To mitigate regulatory risks, it is essential to select pricing software that incorporates compliance features. For instance, Sniffie’s pricing software ensures that your pricing complies with the Omnibus Directive, a consumer rights directive that is in place in all of the EU.

Case Study: Sniffie Software Drives Success for Kipukauppa, a Nordic pain-relief product provider, sought to enhance marketing ROAS and optimize pricing for seasonal items. With €3.2M in turnover, they turned to Sniffie for a Shopify pricing solution.

In the competitive pain-relief market, aimed for growth while conducting responsible business. The challenge was to optimize seasonal product pricing, minimizing excess stock, and determining the right discounts.

Sniffie’s advanced pricing features, including markdown pricing, provided the ideal solution. This strategic approach transformed slow-selling items into attractive deals.

The first markdown campaign was a success:

  1. Clear Understanding: Meticulous planning led to a clear forecast on results and profits.
  2. Sales Boost: The campaign generated an impressive €250,000 in sales with good profitability.
  3. High ROAS: achieved more sales cost-effectively, with a significantly higher ROAS compared to previous campaigns.


Sniffie proved to be a game-changer, enabling to optimize prices effectively and turn challenges into milestones. In the competitive e-commerce landscape, the right pricing solution can make all the difference, as this case study illustrates.

Read the case in detail here:

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