Ecommerce Pricing App

The problem

I recently wrote a post on about how medium-sized businesses can better use data to optimize product pricing. It got quite a bit of interest, which eventually lead to me building a pricing app for the Shopify ecommerce platform.

The app consists of 3 main sections:

  • Creating/Running Pricing Experiments
  • Analyzing Data and Calculating Elasticitites
  • Presenting the Profit and Revenue Maximizing Prices

Create and Run Pricing Experiments

In order to calculate customers’ elasticity to prices we need to first show different customers different prices and track the sales for each. The first screen the store owner sees on the app is the ‘Experiment’ tab. Here they can create different experiment parameters such as price differences, product categories, duration, and so on.



Analyze Data and Calculate Elasticities

The app continually tracks each sale and calculates the level of confidence it has based on the number of sales and conversion rate. Once the confidence level clears a certain threshold, or the experiment duration has ended, the experiment can be ended and the store owner can update the product prices after reviewing the results.



Present the Profit and Revenue Maximization Prices

A dashboard tab in the app lets the store owner track all products that are under experimentation and watch as the results are updated with new purchases. From here, the store owner can view the graph, review confidence levels, and update product prices.




Building this app was a great chance for me to use some of my skills in both web analytics as well as econometrics. It was a great chance to get to take a tool that the largest ecommerce sites have access to and make it accessible for small-medium sized stores. It of course takes longer for a smaller store to gather enough data for the app, but this tool can make it possible for a savvy store owner to answer a lot of questions they have about their pricing. Visit the interactive demo here: