AUTOMATIC CHAINING

Definition

Automatic price linking involves programmatically linking the price of one SKU to that of another SKU according to a predefined rule, and allowing the system to automatically apply the update when the price of the master SKU changes. For example, the price of a family-size item can be linked to the price of the individual-size item using a fixed ratio. Automatic price linking makes it possible to manage product assortments containing hundreds of variants (sizes, colors, packaging) on a large scale without having to manually recalculate each price.

Why it's important

• Ensure consistency across sizes: between variants of the same product (the L size is more expensive per liter than the XL size, as consumers would expect).
• Significantly reduce administrative time: a change to the pilot price is automatically applied to all 12 or 30 linked variants.
• Ensure compliance with business rules: price scale by format, consistent price difference between sizes, fixed ratio between colors of the same SKU.

A concrete example

A household goods retailer sells laundry detergent in three sizes: 1 L, 2 L, and 5 L. The 1 L size is the base price, set at 6.90 €. The automatic pricing chain applies the following rule: 2 L = 1 L × 1.75 and 5 L = 1 L × 3.80. When the pricing system changes the 1 L price to €7.20, the 2 L price automatically changes to €12.60 and the 5 L price to €27.36. Without automatic price chaining, these three prices would have to be updated manually, with the risk of omissions or errors in the ratios.

How to measure/use it

Setting up automatic pricing chaining involves four steps: identifying eligible product families (variants by size, color, and scent); defining the pilot SKU for each family; writing the chaining rules (multiplicative ratio, additive offset, or more complex formula); and configuring the pricing engine to apply the rules with each update. Pricing analytics tools natively support chaining and keep a record of each propagation for auditing purposes.

Common Mistakes

• Chaining without consumer logic: If the 5-liter size is cheaper per liter than the 1-liter size (as expected), this must be reflected in the ratio.
• Forgetting to review the rules: when purchase costs vary across formats, the old rule becomes obsolete.
• Chaining to a secondary driver: if the driver is not widely used, its adjustments drive only a marginal volume and distort consistency.

Learn more

• Research & Data: Price analysis to identify families eligible for automatic enrollment.
• Solutions: Pricing Analytics and Product Matching to configure and streamline the chaining process.
• Tip: Operational Consulting Pricing to structure chaining rules by category.
• Resources: Check out our pricing FAQ to learn the difference between automatic, horizontal, and vertical chaining.

Mini FAQ

How many references can be chained together?

Technically, tens of thousands. In practice, coverage rates range from 30% to 70% of the product assortment in mass-market retail. Beyond that, exceptions become difficult to manage.

What if the pilot is out of stock?

The right tools allow you to define a backup benchmark, which takes over if the primary benchmark fails. This prevents the chain from remaining locked to an outdated price.

Can chaining be combined with competitive rules?

Yes, and it's actually recommended. The pilot price follows the competition, and the other variants automatically inherit the new price through price chaining. This combines competitive responsiveness with internal consistency.