Dynamic Pricing

What Does Dynamic Pricing Mean?

Dynamic pricing is a customer or user billing mode in which the price for a product frequently rotates based on market demand, growth and other trends. It enables setting a cost for software or Web-based product that is highly flexible in nature.


Dynamic pricing is also known as real-time pricing.

Techopedia Explains Dynamic Pricing

Dynamic pricing is designed for Internet-based products and services that experience high fluctuation in demand. Dynamic pricing enables price setting that changes according to current trends and requirements.

Typically, dynamic pricing is implemented through specialized bots or programs that scrape through Web analytics, big data and other market/user insight data to gather pricing, competitor and demand info. Some factors that help in setting dynamic pricing include customer location, age, time of day/week/month, market/competitor pricing and overall demand.

E-commerce and online app services implement dynamic pricing to offer different prices to users according to the time and location from where they are ordering and the product’s current/predicted demand.


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Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.