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Dynamic Pricing Reaches Most Industries

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Dynamic pricing has moved beyond online auctions to a variety of industries, explains e-commerce management expert Mitchell Levy, bringing with it efficiencies in supply, elimination of information inequity, and new intermediaries and business models.
This article is adapted from and used by permission of, Mitchell Levy, Executive Producer. Levy is also the author of Thriving in the Internet Age Through E-Commerce Management.
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The concept of dynamic pricing, commonly used in market economies and auctions, and popularized on the Internet by eBay, Priceline, eWanted, and Mercata, has extended beyond the consumer market. The Internet Exchange model is rapidly being used by both buyers and sellers in the B2B arena across a variety of industries to gain efficiencies in apparent supply, to eliminate information inequity, and to create new intermediaries and business models. One of the arenas of the online world that is changing most quickly is the marketplace. Nowhere is this more obvious than in the Internet Exchange, a term that refers to a set of Web sites used to sell goods at auction. Exchange members meet to buy and sell goods for a market price, negotiating according to a set of rules. In the process, they are creating a new power dynamic between buyers and sellers. Dynamic pricing is going to control a dramatically increasing proportion of transactions on the Internet. In the B2B markets, Keenan Vision estimates that $129 billion of the Internet economy will be conducted using Internet Exchanges in 2002. Dynamic pricing has included auction, haggle, exchange, and the traditional bidding process in C2C, B2C, and B2B transactions off the Internet, and now is moving onto the Web with vigor.

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