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Dynamic Pricing Benefits

Online dynamic pricing can help businesses in a variety of ways. It creates efficient markets by providing a mechanism to eliminate imperfect information, by increasing the geographic reach of smaller suppliers, and by streamlining purchasing processes. By eliminating inefficiencies, suppliers are able to decrease costs and increase revenues on inventory, decrease overhead, eliminate costly middlemen, increase inventory turns, and create new. In addition, dynamic pricing allows for "test pricing," and can yield increased revenue from new and unique items. All this is brought about through communities of buyers and sellers coming together to aggregate supply and demand. Internet Exchanges and auction technologies are creating a new class of intermediaries. These players create their own markets by inserting themselves into niches that previously had been dominated by entities offering only fixed-rate pricing, and offer advantages to both buyers and sellers in the process. The speed with which new companies can enter this space is increasing with the rollout of new auction applications that are faster and easier to implement.

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