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How Dynamic Pricing Works

A simplified overview of what happens when you run a Dynamic Pricing strategy, the steps a price passes through, how you approve the result, and how to read the breakdown.

Dynamic Pricing sets prices from business rules you define, and applies them to selected products across your catalogue. This article explains what happens behind the scenes when a strategy runs, so you know exactly what you're looking at when the suggestions arrive. If you're deciding between Dynamic Pricing and Price Optimization first, see Dynamic Pricing vs. Price Optimization.

Like Price Optimization, Dynamic Pricing does not change your prices automatically by default. It produces suggestions that you review and approve.

The pricing pipeline

Every product's price passes through the same sequence of steps. Each step refines the number before it reaches you for review.

Step

What happens

1. Starting price

The system begins with the product's current selling price.

2. Pricing actions

Your rules run in order. Each action changes the price, and the next action starts from that new price, like a recipe where each step builds on the last.

3. Safeguards

Hard limits ensure the price never breaks your margin requirements or other set boundaries. These override everything.

4. Price grouping

If related products should share one price, the system aligns them.

5. Rounding

Prices are rounded to clean, customer-friendly endings (for example, €24.99 instead of €24.37).

6. Minimum change check

Changes too small to be worth executing are filtered out, ensuring your review stays focused on meaningful price changes.

7. Review

You see the suggested changes and approve or reject them.

Several of these steps have their own dedicated articles: the rules themselves in Pricing Actions: The Building Blocks of a Dynamic Pricing Strategy, the small-change filter in The Minimum Price Change Threshold, and endings in How Price Rounding Works. Safeguards and pricing groups work exactly as they do in Price Optimization, see How to Add Safeguards to Your Pricing Strategy and Pricing Groups – User Guide.

Approving the results

By default, every price suggestion requires your manual approval. Nothing goes live until you accept it, and you can review changes individually or in bulk.

If you'd prefer fully automated pricing, you can turn on auto-approval. When it's enabled, suggested prices are applied as soon as they're generated. Because Dynamic Pricing follows rules you defined, its results are predictable, which makes it a natural fit for hands-off operation once you're confident in the configuration.

Understanding your results

For every product, the results show a full breakdown so you can see exactly how each price was reached.

Field

What it means

Current price

The price before any change.

Suggested price

The final recommended price after every step.

Price before safeguards

What your pricing actions produced before the guardrails were applied.

Safeguard limits

The floor and ceiling values that were used.

Price before rounding

The price after safeguards but before it was rounded.

Step prices

An audit trail showing what each action did: which rule ran, the price it produced, which competitor it used, and whether it succeeded.

Failed actions

Any rules that couldn't run: for example, because competitor data was missing.

Stores

Which stores the price change applies to.

This transparency lets you understand why each price was suggested and troubleshoot when a result is unexpected. If a rule didn't behave the way you expected, the step prices and failed actions are the first place to look. For a walkthrough of the questions we hear most often, see Dynamic Pricing: Common Customer Questions.

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