The Dynamic Factor

New study targets dynamic pricing as key to B2B sales

Framingham, MA  PRNewswire  December 12, 2000  According to IDC's new bulletin, Dynamic Pricing in eMarketplaces: A Definition and Forecast, the percentage of worldwide B2B "dynamic" e-commerce will jump from 5% in 2000 to 13% in 2004. In other words, as B2B e-commerce grows, the value of goods and services sold through dynamic pricing sites will increase more rapidly than overall B2B sales. In the US by 2004, dynamic pricing will represent 20% of B2B e-commerce.

In addition to citing the impact of dynamic pricing on the industry, IDC has also isolated geographic and cultural factors as crucial in determining the extent to which it catches on. Rob Rosenthal, a research analyst for IDC's Internet Economy program, said, In Europe, where venture capital is sometimes difficult to obtain, localization and reaching potential customers could slow dynamic pricing activity. In Japan, where business relationships are most important, the use of dynamic pricing for e-commerce will most certainly lag that of both the United States and Western Europe.

IDC believes that, today, commodities and unique goods are among the safest dynamic pricing sites, while raw materials and components will constitute the next trend in B2B e-commerce. Companies with negotiated, rather than simple, pricing systems are best enabled to buy and sell based on their overall value propositions. Yet, according to IDC, e-marketplaces need to build a clientele and work the bugs out of their transactional models before dynamic pricing can make an impact in e-business solutions.