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Competitor price index (CPI)

Definition updated on November 2023

What is the Competitor Price Index (CPI) and how does it impact pricing decisions?

The Competitor Price Index (CPI) is a measurement tool that compares the prices of a specific set of sneakers offered by a seller to the prices of the same or similar sneakers offered by competitors in the resell market. The index is calculated by taking the average price of the selected set of sneakers offered by a seller and dividing it by the average price of the same or similar sneakers offered by competitors. The result is then multiplied by 100 to get a percentage. A CPI of 100 means that the seller's prices are, on average, the same as the competitors' prices. A CPI greater than 100 indicates that the seller's prices are, on average, higher than the competitors' prices, while a CPI less than 100 indicates that the seller's prices are, on average, lower than the competitors' prices. For example, if the average price of a selected set of sneakers offered by a seller is $200, and the average price of the same or similar sneakers offered by competitors is $220, the CPI would be (200/220)*100 = 90.9. This means that the seller's prices are, on average, 9.1% lower than the competitors' prices. In the sneaker resell market, understanding the CPI can help a seller to position their prices competitively in the market and identify opportunities to increase or decrease their prices to maximize profits. For beginners in the sneaker resell market, it is important to regularly monitor the CPI and adjust their prices accordingly to remain competitive.

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