Craig Clark sells bras and collectibles on Amazon. He’d always adjusted his prices manually by comparing with competitors’ items. But he was spending most of his time on this task due to constantly evolving prices on the Amazon marketplace.
Clark looked for an automatic repricing solution and found it in Feedvisor, a company headquartered in Tel Aviv.
“Feedvisor continuously monitors what’s happening in the marketplace and uses the information when adjusting our prices. So when other competitors are out of stock, for example, Feedvisor will immediately raise our price, securing a higher profit margin on each sale,” said Clark.
Feedvisor’s self-learning algorithmic repricer spurred an overnight average sales revenue increase of 25 percent for his business, with some categories multiplying by 400%. Automated repricing, within lows and highs Clark controls, has freed him to focus on other business aspects, such as expanding from five styles of bras to 15.
Feedvisor coined the phrase “algo-commerce” to describe its cloud-based service. Founded in 2011, Feedvisor is used worldwide by hundreds of mid-market online retailers (selling between $1 million and $100 million per year) to manage more than $1.5 billion in gross merchandise volume.
The company recently closed a $5 million venture funding round led by Square Peg Capital, bringing its total raised capital to date to $13 million. It is recruiting an additional 50 employees, including native English-speakers, for technical, marketing and support positions.
Automatic analysis and repricing
“For retailers to stay relevant in today’s market there is an urgent need to adopt a dynamic pricing strategy that reflects ongoing changes in market conditions and the competitive environment,” says CEO and founder Victor Rosenman.
Feedvisor’s machine-learning algorithms automatically analyze market dynamics, changes in demand and price perception, enabling accurate pricing decisions that eliminate human bias.
Rosenman, 43, came to Feedvisor with a technical and business background. He was drawn to solve problems in ecommerce, he tells ISRAEL21c, because “e-commerce retailers are typically entrepreneurs who share the startup mentality and are open to innovation and new solutions to gain a competitive advantage.”
He started by consulting for e-tailers to better understand their needs. “I learned they are very savvy about finding the right product and selling it, but not as savvy about technology to do business successfully. And I realized that pricing is the most complex area they need to deal with.”
Factoring customer service into prices
When people price a purchase online, they can easily scan retailer rankings on platforms like Amazon, eBay or Google Shopping that take into account not only prices but also factors such as shipping speed, customer service and refund/return handling. Without knowing the exact impact of their pricing on the rankings, sellers typically choose to stay on the safe side by focusing only on setting a cheaper price than competitors.
“This creates an environment where price navigates to the bottom and erodes profit margin, and that is not good for buyers either because retailers can’t sustain their businesses that way and have no incentives to invest in improved buyer experience,” Rosenman explains.
“Feedvisor does mathematical models to understand the relative value of your service and factors that into the price. The price therefore accurately reflects the value of the service in addition to the product itself.”
Feedvisor’s dashboard lets users know which areas need improvement in order to avoid unnecessary price-lowering.
“We counsel retailers to improve their service level and enable them to translate that improvement into the pricing — and then everyone benefits. If retailers simply undercut on price they don’t have money to spend on customer service,” says Rosenman.
Feedvisor client Numoon, an online store for household and baby items, nearly quadrupled profits on Amazon within a year of signing up for Feedvisor’s repricing solution in May 2014. The proprietors were able to increase inventory from 1,100 to 3,800 items because they gained back all the time previously spent on manual repricing. “We are no longer in the position of having to undersell all the other sellers,” reported one of Numoon’s co-owners.
Square Peg Capital partner Dan Krasnostein said the rapidly growing global ecommerce market has already exceeded $1 trillion in gross merchandise sales and named pricing as one of the top challenges for e-tailers. “We are thrilled to support the Feedvisor team as they continue to provide this invaluable solution to their rapidly expanding customer base,” Krasnostein said.
Feedvisor will use the newest infusion of funds to expand its reach and its staff of 70, both in its Tel Aviv headquarters and its recently opened New York office.
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