Fluctuating sales prices – here are the reasons

Our sales prices change – sometimes several times a day. Our clients often notice and comment on this. About time to create transparency and show that external factors are the main influence on our sales prices. 

Imagine this: a customer purchases a new television. Two weeks later, she finds that the identical model is now available for a 10 percent lower price. Of course, she gets annoyed with the shop she bought it from, even if the TV was an excellent deal at the time when she got it and nothing indicated that its price would drop soon. This begs the question: why do sales prices fluctuate – sometimes several times a day? 

Does the price mechanic rely on supply and demand? Yes, but that’s only half of the story. Sure, supply and demand have an influence on prices. Take, for example, the blocked Suez Canal in the spring of 2021, which resulted in global demand as well as prices of various consumer goods from the Far East to skyrocket within a few days. However, several factors make the sales prices on our online shops change constantly. Four of them are decisive: the purchase price, the availability, the competition’s prices and our costs.  

Availability and purchase prices influence each other 

The two most important factors are purchase price and availability – always together. A good price isn’t enough if we can only get two items at these good conditions. The same goes for high availability at exorbitant prices.  

And that's where the market comes in: if we can buy a product from various sources, a specially developed algorithm decides which combination of availability and purchase price is the best fit. This forms the basis for further price calculation. We are constantly reading and processing new data and our system optimises the selection of the source based on this data. This is also the reason why sales prices go up or down as soon as availability and purchase price change. Moreover, most products are traded in euros or dollars, so currency fluctuations also lead to regular price changes. We update the exchange rate of the European Central Bank daily. 

Market and costs 

The third important factor is the cost involved in providing our services. This includes product maintenance, purchasing, logistics, customer service, accounting, software development, services, mailing, marketing, etc.  

Another factor to consider is the market price as a counterpart to the cost: if the market offers a product at a certain price, the above costs can’t just be added to the price. Why? If the price of the product, let’s say a memory card or blender, is too high, customers will buy it somewhere else. In extreme cases, this means that certain product ranges can’t be sold by any retailer on a cost-covering basis and have to be subsidised 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 coincidental from the customer's point of view. Long-term price formation, on the other hand, follows a rational approach. It requires manufacturers and suppliers to be efficient enough to cover their costs in keeping with the market price and thus ensure the survival of the business. 

Dynamic pricing isn’t our style

What’s important to know is that our prices aren’t personalised. We don't change prices based on your previous purchases, because you visit our shop from an Apple device or because you're a man or a woman. Every visitor to our websites, per country, sees exactly the same price at the same time. The same goes for Galaxus in Germany. 

Pricing philosophy and corporate strategy 

Our pricing philosophy is to offer our customers the best overall offer they can find 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 as a company also strive to make a profit.  
We want to communicate as transparently and fairly as possible with customers and manufacturers. That’s why we’ve been investing the company's profit in improving our services and expanding the company – and will keep doing so. We’re convinced that this will allow us to offer our customers a better shopping experience than the competition. Now and in the future. That’s what we work on every day.