In the latest podcast episode, Gabriel Ginorio, an e-commerce expert with experience at Thrasio and currently working with the innovative pricing optimization tool Catalan, delves into the complexities of pricing products in the dynamic landscape of e-commerce.
This episode offers an in-depth exploration of e-commerce pricing, highlighting:
- The Balancing Act of Pricing: Insights into managing various factors like production costs, market dynamics, and consumer perceptions.
- Learning from Amazon: Gabriel’s experiences at Thrasio shed light on Amazon’s journey and its impact on competitive pricing strategies.
- Innovative Pricing Strategies: Discussion on how pricing affects profitability and the importance of consistent pricing across different sales channels.
- Catalan’s Vision: Expanding the reach of pricing optimization tools to various industries and sellers, including those on Amazon.
- Data-Driven Decisions: The significance of advertising data in shaping pricing strategies.
- Future of E-Commerce: Envisioning an AI-driven marketplace supervised by humans.
Tune in for these insights and much more, as we break down the future of e-commerce and the role of next-gen pricing tools.
The Tightrope Walk of Pricing (1:30):
Pricing involves a delicate balance of numerous variables, including production costs, market dynamics, buyer perception, product lifecycle, demand elasticity, regulations, promotions, discounts, and competitor pricing.
Insights from Amazon’s Evolution (2:40):
Gabriel shares insights from his experience at Thrasio, witnessing Amazon’s growth from a small entity to a global unicorn. Amazon’s unique challenges in dynamic competition and search result optimization are highlighted.
Amazon’s Dynamic Competition (5:21):
Amazon’s marketplace presents challenges with dynamic competition, and optimizing pricing involves using competitors as benchmarks to secure optimal search result rankings and drive conversions.
Nuanced Approach to Profitability (6:01):
Contrary to conventional wisdom, lowering prices doesn’t always result in lower profitability. Finding the optimal price involves a nuanced understanding of the market and consumer behavior.
Uniform Pricing Across Channels (8:38):
Brands benefit from maintaining uniform pricing across channels, considering the savvy nature of consumers who compare prices online. However, pricing strategies may differ based on the significance of revenue sources like Amazon or Shopify.
Adapting to Different Industries (15:00):
While currently focusing on Shopify, Catalan’s vision extends to providing pricing optimization tools for Amazon sellers, recognizing the value it brings to businesses of all sizes.
Predicting Trends and Patterns (21:10):
Examples from pricing scenarios in oil and gas and pharmacy sectors highlight the model’s ability to predict trends, such as the impact of holidays and disease outbreaks, showcasing its potential in adapting to unforeseen market changes.
The Birth of Pricing Optimization (24:20):
The discussion transitions to the origin of Catalan, an initiative by MIT alums aiming to develop a pricing optimization model applicable to various industries.
Role of Advertising Data (27:30) :
The model incorporates advertising data to predict demand accurately, emphasizing the critical role of ads in influencing pricing decisions.
Closing Thoughts (29:00):
The conversation concludes with a glimpse into the future, envisioning a fully automated AI making decisions on product launches, category investments, and pricing, with humans supervising this advanced AI-driven e-commerce landscape.
Listen to the Full Episode Now
This episode offers valuable insights into the challenges and opportunities in pricing for e-commerce businesses, emphasizing the need for adaptability, data-driven decision-making, and the potential of next-gen pricing tools. Gabriel’s expertise and Catalan’s innovative approach promise to reshape the future of selling in the e-commerce space.
You can listen to the full episode here.