How Astra Works
Astra combines multiple pricing strategies to find the optimal price point for each product:
1. Price Elasticity Modeling
Astra analyzes historical sales data to understand how demand responds to price changes. For each SKU, it calculates:
- Point Elasticity: Sensitivity at current price
- Elasticity Curve: How demand varies across price range
- Cross-Elasticity: Impact on related products
2. Competitive Intelligence
When competitor data is available, Astra factors in market positioning:
- Track competitor prices for matched products
- Identify pricing gaps and opportunities
- Respond to competitive moves appropriately
3. Inventory-Aware Pricing
Astra coordinates with Nova (Inventory Agent) to adjust pricing based on stock levels:
- Overstocked: Consider markdown to accelerate sell-through
- Low Stock: Increase price to preserve margin while stock lasts
- Balanced: Optimize for steady margin
4. Multi-Armed Bandit Optimization
For new products or uncertain situations, Astra uses exploration-exploitation algorithms to find optimal prices through controlled experimentation.
Decision Types
Price Increase
Recommended when demand is inelastic and margin opportunity exists
Price Decrease
Recommended when demand is elastic and volume lift is profitable
Markdown
Recommended for overstock or end-of-life inventory
Hold Price
Current price is optimal; no change recommended
Inputs Required
| Data Type | Required | Description |
|---|---|---|
| Products | Yes | SKU, name, category, current price, cost |
| Sales History | Yes | Min 90 days of transaction data |
| Competitor Prices | Optional | Matched competitor pricing data |
| Inventory | Optional | Current stock levels by SKU |
Configuration Options
Customize Astra's behavior in Settings → Agent Configuration:
- Min Margin: Never recommend prices below this margin %
- Max Change: Limit single price change (e.g., max 10%)
- Price Rounding: Round to nearest .99, .95, or whole number
- Change Frequency: Min time between price changes per SKU
- Excluded Categories: Categories where Astra shouldn't recommend changes
Example Decision
Price Increase Recommendation
- Demand elasticity is -0.3 (inelastic)
- Competitor avg price is ₹699
- Current margin (28%) is below target (35%)
- Stock is adequate (45 units, 30 days supply)
- Volume change: -2% (minimal impact)
- Margin lift: +₹45,000/month
- New margin: 34%
Best Practices
- Start with higher confidence thresholds and lower as you build trust
- Review elasticity reports to understand your product price sensitivity
- Set appropriate min margins to prevent margin erosion
- Monitor competitor data quality for accurate positioning