Smart Pricing markdowns and markups

You can implement product pricing markdowns or markups in the Smart Pricing app. Marking down prices for specific products can help you clear inventory profitably for products with slower sales, and marking up prices for specific products can help you quickly make the most out of your best selling products over time.

Markdowns and markups works best for online businesses that sell physical goods and want product-level guidance on which items to discount or raise in price to protect profit margins. You might benefit most from markdowns and markups when your store meets the following criteria:

• Your inventory data lives in Shopify. You sell physical goods that you stock and ship yourself, and your stock levels are recorded in your Shopify admin. Where possible, Cost per item is filled in for each product.
• You have pricing flexibility. You can change your prices without contractual restrictions, and you already use compare-at prices or run promotions through the year.
• You have a meaningful catalog. Around 10 or more active products, so the model has enough data to work with.

Markdown and markup price tips refresh on a weekly basis.

Requirements for pricing markdowns and markups in the Smart Pricing app

To implement pricing markdowns and markups in the Smart Pricing app, you must meet the following requirements:

• You must have a minimum of 10 products, each with more than 25 sales per month.
• You must be selling primarily physical products, not digital ones.

How markdown and markup price tips are generated

For each product in your store, the Smart Pricing model forecasts how your inventory might move over the next 90 days at the current price. The model weighs that forecast against your costs and seasonal demand to identify products where a price change could help you move stock or protect your profit margin.

When generating a price tip, the model considers the following 4 factors:

• Sell-through rate: How quickly a product is selling, displayed as units sold per day. This rate reflects your recent sales and gives more weight to the latest weeks, so it can differ from longer-range numbers, such as your 90-day units sold.
• Available inventory: How much stock you have on hand and how long it would last at the current sell-through rate.
• Seasonality and demand trends: Patterns the model recognizes in your category over time, including potential shifts in demand.
• Cost per item: The amount you pay for each unit, when included on the product's page in Shopify admin. Used to protect margin so a markdown doesn't push the product into a loss.

Based on this forecast, the model generates one of 2 types of price tip:

• Markdown tip: When the forecast indicates excess inventory with a slow sell-through rate at the current price, the model suggests a price decrease or a deeper discount, so you can move the product before margin erodes.
• Markup tip: When the forecast indicates low inventory with a fast sell-through rate, the model suggests a price increase or removing an existing discount, so you can protect margin during the time that demand is high and stock lasts.

Tips refresh regularly as your data updates. A product without a tip this week might have one next week, and a product with a tip this week might not have one next week.

Implement price markdowns or markups

You can implement price markdowns or markups at any time in the Smart Pricing app. These prices are implemented immediately without requiring an A/B pricing experiment. You can choose to implement price markdowns or markups on a per-product basis, or you can accept and implement the price tips in bulk.

Before you apply markdown or markup tips, you can apply a rounding rule so that all price tips fit your store's pricing style, such as ending all prices in .99 or whole numbers. Your changes are saved until the next time tips are published, so you can review and apply them at your own pace.

Price markdowns and markups are implemented separately. However, you should consider implementing both types of price changes to optimize your store's profit margins.

Steps:

1. From your Shopify admin, go to Apps > Shopify Smart Pricing.

2. Do either of the following actions depending on whether you want to raise or lower prices:

   • To lower your prices, in the Mark down prices section, click Review and update.
   • To raise your prices, in the Mark up prices section, click Review and update.

3. Optional: In the Price rounding section, set your price rounding rule for all price tips:

   1. Click the icon.
   2. In the Edit price rounding dialog, enter the value to round price tips to.
   3. Click Save.

4. Optional: In the To review product list, you can do any of the following actions:

   • Hover your cursor over the Markdown/Markup tip column to learn more about why the tip is suggested.
   • To sort the list of products, click and then select the sorting criteria that you want to use.
   • To filter the list of products, click and then apply the filters that you want to use. You can also search the product list using keywords in the search bar.

5. Complete the review for each product's price tip:

   • To accept a price tip for a single item, click Update for that item.
   • To accept price tips in bulk, select all of the products that you want to change, and then click Update. To confirm the bulk price changes in the dialog, click Update again.

6. Optional: Resolve any price tips that you don't want to implement by skipping them:

   • To skip a price markdown tip for a single item, click Skip for that item.
   • To skip price markdowns in bulk, select all of the products that you want to skip, and then click Skip.
   • To review the items that you've previously skipped, click the Skipped tab, and then click Review to move them back into the To review tab.

Export price markdowns or markups as a CSV

You can export a CSV with all the current listed markdown or markup tips. The exported CSV files are divided by the type of price tip that you export the CSV from, so you need to export both CSVs to have a complete picture of all markdown and markup price tips.

The CSV files include the following information:

• The product ID, title, and link to the product in your Shopify admin.
• The reason for the price tip, such as Reduce discount or Lower price.
• Days of inventory remaining and the total inventory.
• The current price and compare-at price.
• The generated tips for price and compare-at price.
• The pricing currency.
• The product price tip status, such as Included or Skipped.

Steps:

1. From your Shopify admin, go to Apps > Shopify Smart Pricing.

2. Do either of the following actions depending on the price tip type that you want to export as a CSV:

   • To export markdown tips, in the Mark down prices section, click Review and update.
   • To export markup tips, in the Mark up prices section, click Review and update.

3. Click Export CSV.

4. Optional: Configure the settings for your CSV export based on any applicable exclusions:

   • To limit your CSV to the products that match any current search filters, click Only include products that match your current filters. You can deselect this option to include all products.
   • To include any skipped products with price tips in the CSV, click Include skipped products.

5. Click Export CSV.

Review the publish history for price markdowns or markups

You can review the markdown and markup price tips you’ve implemented in the last 30 days. The publish history is accessible from both the Markdown tips and Markup tips lists, and record both types of price tips in the same history log.

The publish history includes the following details:

• The product name.
• The old price and the new price.
• The date and time the price tip was published.
• The type of price tip implemented (Markdown or Markup).

Steps:

1. From your Shopify admin, go to Apps > Shopify Smart Pricing.

2. In either the Mark down prices or Mark up prices section, click Review and update.

3. Click Publish history.

Troubleshooting markdowns and markups