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aggregated buying

. This approach was promoted by LetsBuyit.

com, but the business model did not prove viable – the cost of creating awareness for the 

brand and explaining the concept was not offset by the revenue from each transaction.

Baye et al. (2007) reported that European electronics online retailer Pixmania (

www. 

pixmania.com

) used price experimentation to learn about its customers’ price sensitivity. 

They noted that for a PDA, Pixmania adjusted its product price 11 times in a 14-week period, 

from a low of £268 to a high of £283 as part of a series of small experiments that enabled it 

to learn about the price sensitivities of its customers. This pricing strategy also provides an 

additional strategic benefit – unpredictability.

Baye et al. (2007) recommend that online retailers should ask the following questions 

when reviewing pricing online: