How to use price simulator

Price simulator allows you to simulate outcomes of your pricing decisions across different scenarios

Niko Naakka avatar
Written by Niko Naakka
Updated today

Table of contents

Introduction

Price simulator allows you to forecast and simulate what will happen to your volume, revenue and profit when you change prices, change costs or modify covariates.
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In order for the system to be able to create accurate long-term forecast, we need at least 1 full year of historical data for the product(s) in question.

How to start price simulator?

  1. Go to the Product Catalog view

  2. Filter for the products that you would like to include in a a simulation

  3. Select the product(s) with the check boxes at the far left of the product rows

  4. To start price simulator, choose price simulator behind the tree dots in the top right of the action toolbar (represented by plot line)

Clicking the price simulator icon opens a modal, from which you can build your simulation. If you don't see this icon, the module may not be enabled on your account.

You can also open the simulator under the Simulations view by clicking "Add new", which will open fresh simulator.

How to use multi-product forecasting?

Price simulator enables you to simulate and forecast what happens when you perform changes to your products, for a defined period of time in the future, as price, cost or forecasting periods fluctuate.
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First, you need to select products in the simulation. If you opened the simulator from the product catalog view, you can start simulation from currently selected products by selecting "start a new simulation". This will automatically choose products in the simulation.
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When opening Price simulator from the catalog, you can continue an existing simulation or start a new one with the products you selected.

Adding products in the simulation

You can add products to the simulation under the Variant breakdown view. At the top of the table, click the Add products button, which opens product addition modal.

You then filter and select the desired products, and then save. If you close the addition modal without saving, the products are not added.

Note that simulations require at least one product to be present, otherwise simulations cannot be performed.

Removing products from a simulation

In the variant view, select the products you want to add and then click remove.

Locking and unlocking prices in the simulation

Sometimes you may want to manually modify prices in the simulation or lock them. You can do this by clicking selecting the product in the variant view, and clicking the lock. It locks the price so that it won't change if you change controls. It also allow you to manually edit the price inline in the table. If you do this, it will remember this until you unlock the product in the simulation, which then makes it so that controls are respected again.

Creating scenarios

At the top of the simulation in the selector, you can add new scenarios in the simulation. The maximum number of scenarios is 5 and you cannot create more than this. You can remove created scenarios from the trash can icon in the selector, and rename the scenario from the edit icon in the selector.

Configuring scenario parameters

Scenarios have individual controls that allow you to compare how different changes affect the products. You can open controls by clicking the controls accordion.

The first control is solver. If you don't use a solver, it allows you to manually change price. Other solvers are profit, revenue, volume and market solvers (requiring market data). Choosing any of these other solvers disables the price change input field.


Costs and price changes are represented as percentages. For example, if you set -20 in the price change in percent field, you are asking the system to evaluate what happens if you decrease the price of all products included in the simulation by -20%. The same principle applies to the cost change in percent field.
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Stock modifier allows you to see what happens if you modify stock by a percentage in this scenario. Note that if stock is currently zero, increasing it with any percentage is always zeor.

You can also define the average order-level extra discounts and discount usage here.

Furthermore, you can choose the price range in which the changes are performed. Price min and max fields allows you to control that prices are simulated only in that region. This is reflected in the profit, revenue and volume graphs.

Configuring simulation length

Under controls in the middle, you can define simulation start and end date. This is shared across scenarios. Same with "infinite" stock option, which makes assumes you are able to continue to sell the product if stock is <= 0.

Comparing scenarios against each other

Under forecasted results tab, you can see scenario comparisons across your scenario parameters. Baseline is always represented, which is the scenario under which you would not change anything at all.

Scenario comparison of scenarios -20 and -30 against baseline.

Publishing a scenario

Once you have chosen which scenario you would like to proceed, you can publish it. At the bottom of the simulator, you have Publish button. Clicking it opens the publish modal. Here you can select when the price changes happen, and if you want to create them as one-off changes or as a campaign.

Publish simulation view. Chosen scenario is shown at the top. Here simulation is about to be published as a campaign.

Once you publish a simulation, it will appear under the published simulations view. If you published a simulation as a campaign, it will also appear under campaign calendar. Published prices are scheduled and shown immediately in the pricing log under scheduled price change.

Saving a simulation as a draft

You can save the simulation as a draft by saving the simulation as a draft, and giving the simulation a name. You can see all you simulations that you have saved as a draft under Simulations view.

The saving modal appears always if you have continued to the variant view in the simulation and you click exit. If you don't want to save the simulation as a draft, you can close this modal without saving.

Save simulation modal

I decreased the price, volume increased, but profit dropped. Why is this?

Depending on the price/profit elasticity and the costs of the product(s), increasing volumes might not mean increased profits. Look into the profit vs. price and volume vs. price graphs, which you can see either in the variant breakdown or under the current situation tab.

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