Definition
Dynamic pricing means your prices change automatically in response to live market conditions — competitor listings, demand signals, and inventory levels — rather than staying fixed until you manually update them. It sounds simple, but most sellers confuse it with rule-based repricing, which is something narrower. Understanding the difference, and knowing where a hard floor fits into both models, is what separates sellers who compete intelligently from those who race each other to zero.
Rule-based repricing follows a fixed instruction: 'always be $0.10 below the lowest price.' It reacts to a snapshot of the market and applies one formula regardless of context. Dynamic pricing is broader — it can weigh multiple inputs simultaneously, including velocity, time of day, seasonal demand, and competitor behavior patterns, then adjust price along a range rather than by a fixed delta. In practice, most eBay repricers sold today are rule-based engines with a dynamic-sounding name. True dynamic pricing introduces variable aggressiveness: the system may move more steeply toward the floor on some items, or hold closer to a premium price point on others. Undercut's per-listing AI aggressiveness tuning (available on the Pro and Scale plans) lets you set, per listing, how fast and how far that listing moves toward its already-set floor.
Every dynamic pricing system, no matter how sophisticated, needs a lower bound. Without one, competitive pressure from other automated sellers cascades downward until someone sells below cost. A hard floor is a per-item minimum price that the repricing engine will never cross, regardless of what competitors do. It is not a soft preference or a warning threshold — it is a hard stop. Undercut enforces the floor at the listing level, so each SKU carries its own minimum independent of every other SKU in your catalog.
A floor is not a guess. It is derived from your actual unit economics. Take a common scenario: you sell a USB-C hub that costs you $8.00 landed. You ship it yourself and average $4.00 in postage. eBay's final value fee on electronics is approximately 13.25% of the total sale price (item + shipping). You want a minimum net margin of 15% on the item cost. Here is the floor calculation step by step.
Let F = floor price (item only, buyer pays shipping separately in this example).
Fees = 13.25% × F = 0.1325F Required net = cost + target margin = $8.00 × 1.15 = $9.20 F − 0.1325F = $9.20 0.8675F = $9.20 F = $9.20 ÷ 0.8675 ≈ $10.61
If shipping is included in the listing price, add $4.00 to the right side: F ≈ $15.22. If you want the full 15% on the combined cost-plus-shipping, the calculation becomes: 0.8675F = ($8.00 + $4.00) × 1.15 = $13.80, so F ≈ $15.90. Set $15.90 as the floor in Undercut and the engine will never take you below it, regardless of how aggressively competitors reprice.
The floor defines the bottom of the range. Everything above it is where dynamic logic operates. Undercut's default mode targets the lowest active competitor price and undercuts it by the smallest increment needed to be the cheapest visible option — typically $0.01 to $0.05 depending on the category. On the Pro and Scale plans, per-listing AI aggressiveness tuning adjusts this behavior on listings you choose: a more aggressive setting moves that listing toward its floor faster, while a conservative setting holds higher in the range longer. You decide the setting per listing — the AI only controls how fast and how far each listing moves toward the floor you already set, never the floor itself. This is the practical difference between a flat undercut and a tunable one as applied to eBay.
eBay does not have an algorithmic buy box equivalent to Amazon's in most categories — visibility is driven by Best Match, which weighs seller reputation, shipping speed, and price together. Dynamic pricing on eBay therefore targets competitive positioning in search results, not a single box. This means the payoff of aggressive dynamic pricing is highest in high-volume, price-sensitive categories like consumer electronics, media, and commodity parts, and lower in categories where buyers sort by condition, rarity, or seller feedback rather than price alone.
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Start freeIf a competitor drops below my floor, will Undercut match them?
No. Undercut holds your listing at your floor price and stops repricing downward. The engine does not follow competitors below your set minimum under any circumstance. Your floor is a hard stop, not a preference.
What is the difference between dynamic pricing and just setting a minimum price manually?
Setting a minimum manually is a one-time action — you set it and forget it, and the price sits there until you change it. Dynamic pricing continuously adjusts your price within the range between your floor and ceiling in response to live competitor activity. The floor and ceiling you set define the boundaries; dynamic logic decides where within those boundaries to price right now.
Does dynamic pricing work differently for fixed-price listings versus auction listings on eBay?
Yes. Undercut reprices fixed-price (Buy It Now) listings only. Auction listings have prices set at the time the auction starts and cannot be changed mid-auction by a repricer. Dynamic pricing as a strategy is almost entirely a fixed-price phenomenon on eBay.
How fast does Undercut reprice, and does speed matter for dynamic pricing?
Free and Starter plans reprice hourly. Pro and Scale both reprice every 15 minutes — the fastest cadence Undercut runs; Scale's difference is capacity (up to 10,000 listings) and priority support, not speed. Fast repricing matters most in high-velocity, price-sensitive categories where multiple sellers are automated — if your repricer is slow, a competitor's faster engine will undercut you and hold the position. In slower categories, repricing frequency is less critical than floor accuracy.
Can I use different floors for different listings, or is the floor account-wide?
Floors are set per listing in Undercut, not account-wide. This is intentional — your cost basis, fee structure, and margin requirements differ by item, so a single account-wide floor would either protect some items incorrectly or leave others unprotected. You set the floor for each SKU based on its own unit economics.
Related: What Is a Price Floor? · What Is Repricing? · How to Avoid Selling Below Cost on eBay · Repricing Without Losing Margin · eBay Pricing Strategy Guide · AI Repricing on eBay