What is an algorithm-based recommended price?
An algorithm-based recommended price is the price calculated by a price intelligence system for a product group, based on current competitor prices, your pricing strategy and the configured cost threshold. It is a recommendation, not an automatic price change.
Short answer
- The algorithm starts from the prices of the competitors you added to the group; out-of-stock ones are excluded.
- It applies your strategy: undercut by a percentage (1 % by default), match the median or margin over cost (5 % minimum margin by default).
- The recommended price never goes below the cost floor, then the chosen rounding is applied.
- The result is a number you can approve (it then goes to your system through a signed webhook or directly to 4buildsite and 4shopy shops; with no system linked it stays inside 4pricing) or ignore; it is not sent anywhere without your approval.
How the algorithm calculates the recommended price
- Reads the current prices of the competitors in the group, meaning the product pages you added yourself.
- Excludes out-of-stock competitors and calculates the minimum, maximum, average and median of the rest.
- Applies the configured strategy: for example undercut = competitor minimum − the chosen percentage (1 % by default), match the median, or cost × (1 + minimum margin). Without a cost, margin over cost falls back to undercut.
- Checks the cost floor: if the calculated price would be below it, the recommendation stays at the floor; then applies the chosen rounding (none, .99, .90 or whole number).
- Shows the recommended price next to the group comparison: your price, the minimum, the median and the verdict.
Difference from a manually estimated price
An experienced merchant can estimate the optimal price for one product, but can hardly do it for many products at every check. The algorithm-based recommended price applies the same logic, consistently, to every group. The strategy can also be set differently for specific groups where margins differ.
Algorithm-recommended price versus manually estimated price, on four criteria.
| Criterion | Algorithm-recommended price | Manually estimated price |
|---|---|---|
| Products covered | Every product group in the panel | One product at a time |
| Refresh | Based on the latest check data | Hard to repeat at every check |
| Consistency | The same logic applied identically | Varies with fatigue and subjectivity |
| Basis of calculation | Competitor data, strategy and cost floor | The merchant's experience |
Common mistakes
- Applying the recommended price without manually verifying it for the first few iterations.
- Not updating the cost when your purchase price changes — the cost floor becomes outdated.
- Using the same strategy for products with different margins.
How 4pricing helps
4pricing.net calculates the recommended price for every product group, based on the competitors you add yourself, the chosen strategy (undercut, match the median or margin over cost), the minimum margin and the rounding. You can set the strategy per group. You decide: the recommended price is applied after your approval (in the panel or through the API) — it goes to your system through a signed webhook or directly to shops built on 4buildsite and 4shopy; with no system linked it stays inside 4pricing. The automatic level, inside limits you set, exists only if you switch it on (off by default, depends on your plan). On marketplaces the update is made by your system or by you.