Dynamic Pricing Strategy

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Michael Kinch | Forum Activity | Posted: Mon, Dec 14 2015 11:54 AM

Typically it is better to purchase books in larger bundles such as base packages.  So my question is if there are two packages or bundles that you plan to purchase, considering dynamic pricing is it usually better to pick up the higher priced package first and then the lower one.  The website suggests an upgrade to Diamond based on the products that I already have.  These are some of the packages that I have an interest in.

Diamond Base Package is $1,300.00

SDA Platinum is $400.00

Would it be better to purchase the Diamond Base Package and let dynamic pricing kick in and then get the SDA Platinum Package or the other way around?

I also notice that the Standard Base Packages are less expensive then their counterparts in the denominational packages.  Standard Diamond for me is $1,300 whereas the Reformed Diamond is $1,550.  Would it be better to take the Standard and then later the Reformed?

I am trying to get a handle on pricing strategies.  Thank-you for your comments and suggestions.

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NB.Mick | Forum Activity | Replied: Mon, Dec 14 2015 12:25 PM

Since dynamic pricing gives you an exact percentage discount of the value of the works you own as a part of the total dollar value of the package, it also gives only a reduction of the total that reflects the overal package rebate. Which means, the order of buying only makes a difference when the packages offer a different percentage rebate for you.

It thus makes sense to buy the package first with the higher rebate (you pay less for the overlapping resource's part of the bundle) 

To give an example.

Assume I wanted to get Baptist Silver Silver and Classic Gold in the current Christmas sale. Both packages contain the NAC commentary set (NB: which alone, with a substantial dynamic pricing discount for the volumes I already own, would be $100 more expensive than either of those sets).  

Gold says for me:

235.43 of 1934.07 is 12.2% which means Gold gives me a 87.8% package rebate

Baptist Silver is 262.86 for resources in a total value of 2310.83, which means it gives 88.6% package rebate

So it makes sense to buy Baptist Silver first, then buy Gold at an even more reduced dynamic price.

But the savings I'd get by this are minimal. The NAC remainder is listed at 351.15 in the column "full price would be". Due to the package discount I pay the portion of 39.94 for it in my dynamic price for Baptist Silver, which will reduce my dynamic price for Gold by a portion of 42.74 . So I could save a whooping EUR 2.80    

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Matthew | Forum Activity | Replied: Mon, Dec 14 2015 12:33 PM

I would call or email sales. They could give you the definitive answer based on your specific library and the contents of what you plan on purchasing. 

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Mark Barnes | Forum Activity | Replied: Mon, Dec 14 2015 2:00 PM

N.B.Mick is right, both in the logic, and the fact that with base packages it rarely makes much of a difference because all base packages have a very similar discount rate (just below 90%).

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Michael Kinch | Forum Activity | Replied: Mon, Dec 14 2015 2:10 PM

Mark Barnes:

N.B.Mick is right, both in the logic, and the fact that with base packages it rarely makes much of a difference because all base packages have a very similar discount rate (just below 90%).

 Thanks Mark, so then if a product or package is also in a base package, it would make more sense to get the base package rather then purchasing the product alone and the base package later.  Is that correct?

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JT (alabama24) | Forum Activity | Replied: Mon, Dec 14 2015 2:13 PM

Michael Kinch:
Thanks Mark, so then if a product or package is also in a base package, it would make more sense to get the base package rather then purchasing the product alone and the base package later.  Is that correct?

Most of the time, yes. When you can pick up steals of deals, especially freebies, it works the other way. 

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Mark Barnes | Forum Activity | Replied: Mon, Dec 14 2015 2:30 PM

Michael Kinch:
Thanks Mark, so then if a product or package is also in a base package, it would make more sense to get the base package rather then purchasing the product alone and the base package later.  Is that correct?

Unless the product is discounted at around 90% or above, then definitely buy the base package first.

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Mark Barnes | Forum Activity | Replied: Mon, Dec 14 2015 2:48 PM

Michael Kinch:
I am trying to get a handle on pricing strategies.

I've posted previously about exactly how dynamic pricing works.

Mark Barnes:

This illustration might help.

  • Imagine a product that bundles ten resources and sells for $250.
  • Five of the resources are valued at $20, three at $40 and one at $100. The total value of the bundle is therefore $340.
  • You already own two of the $20 resources, one of the $40 resources, and the $100 resource. The total value of what you already own is $180.
  • You therefore own 53% of the bundle (180/340).
  • You therefore receive a 53% discount on the bundle price of $250. So you pay $117.65 for the bundle.

When working out your discount, it doesn't matter what you paid for the resources you already owned. You may have even picked them up free. All that matters is what Faithlife value them at. That value is the usual price the product sells for.

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