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Pricing Engine: Mastering Logistics Pricing
In today’s competitive logistics landscape, the pricing engine has become an important tool for last-mile delivery businesses and other logistics service providers. That’s because most of these businesses still struggle with pushing digitization and effectively utilizing advanced pricing strategies. However, due to the current inflation, there is an increasing need to implement technologies that optimize the delivery process and use sophisticated pricing parameters.
Recognizing this, we’ve developed a delivery management solution that features a pricing engine designed to meet the complex demands of the logistics and last-mile delivery market. In this article, we’ll explore how pricing engines benefit logistics services and last-mile delivery businesses in terms of operational efficiency and profitability.
What Is a Pricing Engine?
A pricing engine, also known as pricing management, involves the process of setting and optimizing the prices of products and services to match the goals and strategies of a business.
This dynamic sector involves the delivery of goods to recipients, often within short timeframes and varying levels of demand. In this case, a pricing engine such as the one from Glow takes into account parameters as postal codes, kilometers driven, gross weight, volume weight, etc.
How Glow's Pricing Engine Work?
Glow’s Pricing Engine is designed to facilitate the setup of dynamic pricing models tailored to the unique requirements of a business’s services or products. Ours operate by allowing businesses to:
- Build Pricing Hierarchy: The Pricing Engine allows last-mile delivery businesses to build a hierarchical pricing structure. This means that once a price list is determined, its selection at any given moment depends on its hierarchical position within the system and the specific details of the order being performed. This ensures that pricing can be precisely tailored to the diverse needs of different services and products, reflecting the unique aspects of each business’s delivery model or product offering.
- Price Lists for Targeted Actions: While pricing engines significantly automate the pricing process, they also provide an important feature for last-mile delivery and logistics businesses: the ability to manually adjust prices. With this tool, businesses can set up fixed pricing for simple transactions, quantity-based pricing for volume, weight, and distance, and advanced two-dimensional and multi-dimensional matrices for advanced pricing models. This enables businesses to quickly respond to sudden market changes, ensuring they can remain competitive and retain control over their pricing strategies.
What Are the Benefits of a Pricing Engine?
Using a pricing engine offers significant benefits to last-mile delivery and logistics businesses, particularly in efficiently managing common challenges like fluctuating fuel prices and operational costs in last-mile delivery. Through dynamic pricing strategies and real-time adjustments based on supply and demand, businesses can maximize revenue during peak demand periods and offer competitive pricing.
The driver self-billing calculation feature, on the other hand, helps to build a direct connection between driver compensation and the business’ pricing strategies. This ensures transparent payment structures, thus fostering trust between businesses and their drivers.
Glow’s Pricing Engine stands out as an indispensable tool for last-mile delivery and logistics businesses due to its ability to handle diverse pricing methods, including parameters, setups as well as business logic. For several years, customer agreements have had different pricing parameters. As a result, we help businesses navigate the specific pricing requirements and adapt their strategies according to their goals.
Interested in our delivery management solution?
Reach out to us and learn how Glow can help courier services stand out from the competition and impress customers with a seamless delivery experience.
