Nowhere is this more obvious than in the Internet Exchange, a term that refers to a set of Web sites used to sell goods at auction. Exchange members meet to buy and sell goods for a market price, negotiating according to a set of rules. In the process, they are creating a new power dynamic between buyers and sellers. Dynamic pricing is going to control a dramatically increasing proportion of transactions on the Internet. Dynamic pricing has included auction, haggle, exchange, and the traditional bidding process in C2C, B2C, and B2B transactions off the Internet, and now is moving onto the Web with vigor.
Dynamic pricing benefits Online dynamic pricing can help businesses in a variety of ways.
It creates efficient markets by providing a mechanism to eliminate imperfect information, by increasing the geographic reach of smaller suppliers, and by streamlining purchasing processes. By eliminating inefficiencies, suppliers are able to decrease costs and increase revenues on inventory, decrease overhead, eliminate costly middlemen, and increase inventory turns. All this is brought about through communities of buyers and sellers coming together to aggregate supply and demand. Internet Exchanges and auction technologies are creating a new class of intermediaries. These players create their own markets by inserting themselves into niches that previously had been dominated by entities who offered only fixed-rate pricing.