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How do we prevent pricing arbitrage when offering different rates in different countries?

Based on the guidelines in our SaaS pricing book, Price to Scale, there are several strategies to limit pricing arbitrage when offering varied rates in different countries:

  1. Align Pricing with Local Value
    Adapt prices to reflect local market value differences rather than simply converting currencies. When the value proposition is tailored to each market—for example, through localized features or support—the incentive for arbitrage is reduced because buyers in different regions receive unique benefits.

  2. Regional Bundling and Feature Differentiation
    Design product bundles or tiers that include features or services specific to each region’s needs. This localized bundling reduces the appeal of purchasing a lower-priced version solely for cost-saving since the offerings are not identical.

  3. Channel and Reseller Controls
    Implement policies that restrict the channels through which international customers can purchase your product. By controlling distribution and monitoring reseller activities, you can mitigate practices where accounts might be used to exploit pricing differences.

  4. Transparent Policy and Enforcement
    Clearly communicate your pricing policies, and if applicable, enforce limits such as geo-blocking or using customer verification to ensure that each user is charged the rate intended for their market.

In summary, our book emphasizes that preventing arbitrage is not just about setting different international prices, but about structuring your overall value proposition, product bundling, and sales channels to ensure each market’s unique context is reflected in the offering. This holistic approach helps maintain pricing integrity across regions while catering to local market conditions.

Get Started with Pricing Strategy Consulting

Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.

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