When you run a Price Optimization strategy, the system needs to know what you're optimizing for. There isn't one universal "best" price: the ideal price for maximizing profit is often different from the one that maximizes revenue or unit sales. This article explains the three objectives you can choose from and when each one makes sense.
The three objectives
Objective | What it optimizes for | When to use it |
Profit | Margin × volume | The default for most retailers. Finds the price that generates the most total profit. |
Revenue | Price × volume | When topline growth matters more than margin, for example expanding market share or clearing inventory. |
Demand | Unit volume | When moving units is the priority, for example perishables, seasonal stock, or freeing up warehouse space. |
Blending objectives
You don't have to pick just one. The objectives can be blended by weighting them. For example, a 70% profit / 30% revenue setting primarily optimizes for profit but leans toward higher revenue where it can. If every weight is left at zero, the system falls back to weighting all three equally.
Which one should you start with?
For most merchants, 100% profit optimization is the most intuitive starting point: the system simply finds the price that makes the most money. Blending in revenue or demand is a more advanced setting for specific situations, such as a growth push or a clearance period.
One thing to know about profit and cost data
Profit optimization depends on knowing each product's cost. If a product is missing cost data while profit is part of your objective, the system can't calculate its profit, so it leaves that product's price unchanged rather than guessing. Choosing a pure demand or revenue objective (with no profit weight) lets those products be optimized normally, because neither of those goals needs cost data.
If you'd like to understand why a product was left unchanged, see Why Some Products Aren't Optimized. We strongly recommend completing your cost data before relying on profit-based optimization.