Definition:
Rule-based pricing is a structure that automates price changes following predefined logic. Rule-based pricing can include margin floors, competitive thresholds, clearance triggers, and scheduled rule sets that ensure automated pricing actions adhere to business strategy.
Why It Matters:
- Enables strategy enforcement without manual intervention.
- Ensures compliance with margin and price boundaries.
- Simplifies consistent price automation at enterprise scale.
Example:
A retailer sets a rule that their product price should stay within 5% above or below the average competitor price, while maintaining at least a 20% margin. If competitors sell a product around $100, the system keeps the retailer’s price between $95 and $105, adjusting automatically when competitor prices change.