New online pricing solution to debut this month

According to recent statistics from McKinsey & Co., product pricing has a greater impact on profitability than either sales volume increases or cost reductions -- a typical company’s operating profit can surge by nearly 17% from just a 2% improvement in price levels. Technology to be launched later this month by Optivo, a Palo Alto, Calif.-based technology developer, will provide a new twist on dynamic pricing by giving e-retailers the opportunity to test customer reactions as they happen, then automating accurate decisions instantly based on demand.

The online pricing solution already has driven up profits by 20% to 40% among early testers. “Improved pricing represents a large and as-yet untapped opportunity for pure plays and for traditional offline companies that have ventured onto the Internet," says McKinsey analyst Walter Baker.