How do I find out that a competitor cut a price?

Automated price monitoring emails you the moment a competitor changes a price. You do not have to check yourself.

Do I always have to react when a competitor drops the price?

No. Before reacting, look at: how big the price gap is, whether it is a temporary campaign or a permanent change, what your margin is and what your position is relative to the rest of the competitors.

What is a price war and how do I avoid it?

A price war is a situation where two shops keep cutting prices against each other until both lose margin. Avoid it by looking at the context of the change: whether the competitor cut the price only on this product or across the whole category.

How fast do I need to react?

It depends on the product price and category. Electronics is reacted to within an hour, fashion within a day. Fast reaction requires automated alerts.

How to respond when a competitor cuts prices

A competitor cut the price on Friday at 17:00. You notice it on Monday morning. In the meantime some customers have already left. By then it is late to react, or at least significantly more expensive.

Reacting fast requires automated alerts. But it is just as important to know how to react. Not every price change calls for a response.

Step 1: Get the alert immediately

The first condition is an alert. Without automated competitor price monitoring you always react late.

Comprice sends an alert the moment a competitor changes a price. Not once a day, but immediately after the change is detected. The alert includes:

Which product, which competitor
The old and new price, and the size of the change
Your current position after the change

Step 2: Analyse the change before reacting

Not every price change calls for a response. Before deciding, ask three questions:

Is it temporary or permanent?

Campaign prices usually last 3–14 days. If a competitor cut the price drastically over one weekend, it is probably a campaign, not a new permanent price. Price history shows whether this pattern is familiar.

How big is the price gap?

If a competitor is 50 cents cheaper on a 50-euro product, that is a 1% difference. Most buyers do not switch shops over it. If the difference is 5 euros, that is already 10% and needs attention.

What is your position across the whole category?

One competitor cut the price. But where do you stand relative to the rest? If you are still in position 2 of five, the situation is different from dropping to position 5.

Step 3: Decide how to respond

You have three options:

Cut the price

Reasonable if the price gap is significant, the change looks permanent and your margin allows it. Just be careful of a price war. If both sides keep cutting, both lose.

Hold the price, accept the loss of position

Reasonable if the change is temporary, the price gap is small, the product is margin-critical or you differentiate in other ways (fast delivery, extra warranty, and so on).

Watch and decide later

Reasonable if you are unsure. Watch your sales figures and position over the next 3–5 days. If sales drop significantly, that is a clearer signal.

How to react faster

The best reaction is fast and contextual. It requires:

Real-time alerts (not a once-a-day summary)
Price history that shows whether the change is normal behaviour for that competitor
A view of your market position after the change, showing where you stand now

All three are built into e-shop price monitoring.

If you want to set up automated alerts for your shop, try it free.

Read on: competitor price monitoring · how to know if your prices are competitive