Determining Optimal Purchase and Selling Prices by Using the Tendency of Gross Profit in E-Commerce Business

Abstract

Product price generally tends to decline as time proceeds. However, in Electronic commerce business (hereafter called “EC”), it sometimes increases influenced by supply and demand conditions; therefore, it is difficult to predict the future price. On the other hand, profit rate does not grossly fluctuate among companies running the same business. Focusing on this point, this study analyzes the tendencies of gross profit using the actual purchase and selling data of a certain EC operator, and also explores for the possibility of determining the optimal price by using these tendencies.