The Magnification of Pricing errors.

A 1% error in pricing causes a magnified effect on profit because revenue is several times operating profit. A 1% increase in price without any reduction in demand can increase profit for Sprouts (a grocery chain) by 14% and for Amazon by 500%.

The scientific method of pricing can be used in e-commerce settings. The potential exists in a wide range of markets. A few e-commerce examples include online grocers, device manufacturers and online booking of golf tee-times.


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