Although it is a good idea to monitor prices, there are several risks involved with implementing a price monitoring program. These are the three risks of a price monitoring program.
1) High Risk: Enforcing an artificial price-fixing scheme.
2) High Risk: Disrupting market supply and demand balance.
3) Low Risk: Creating cost savings for customers and employees.
Enforcing an artificial price-fixing scheme.
Price monitoring programs can lead to market disruption. If a company enforces an artificial price-fixing scheme, they are taking away the decision making power of consumers and employees.
Disrupting market supply and demand balance.
When a company has a price monitoring program, they typically do so to make sure that the business is competitive and prices are in line with their competition. When companies use price monitoring programs to enforce an artificial price-fixing scheme, it can disrupt market supply and demand for other businesses.
Creating cost savings for customers and employees.
Creating cost savings for customers and employees is one of the most common benefits of a price monitoring program.If a company has a set price in mind, they will stick to the plan until something changes in the market.
If you are implementing a price monitoring program, it’s important to keep track of what your competitors are doing so that you can stay competitive. This could result in increased customer satisfaction as well as more sales and profits.