Price erosion
Price erosion is the gradual decline of a product's market price over time, typically caused by competition between resellers, discounting and mutual undercutting. Unlike a one-off promotion, erosion is structural: once the market has settled at a lower price level, it rarely climbs back on its own.
How it happens
The usual sequence: one reseller lowers its price — to clear stock, win the buy box or gain share — competitors follow to stay competitive, and automated repricers accelerate the cycle by reacting within hours. Grey-market sellers with a different cost base can trigger the same spiral. Each step looks small; the sum is a market price well below where the brand positioned the product.
Why it hurts
Eroded prices squeeze reseller margins, which makes the product less attractive for retailers to stock and promote. A structurally low street price also resets what customers consider the normal price, undermining the brand's positioning and its recommended price. That combination — thin retailer margins plus damaged price perception — is why brands treat erosion as a channel-health problem, not just a pricing statistic.
What brands do about it
Common responses are selective distribution (choosing which resellers may carry the product), clear recommended prices, addressing the source of unusually cheap supply, and continuous monitoring so erosion is caught while it is one shop's behaviour rather than the whole market's new normal.
How PricePatrol fits in
PricePatrol shows per product, per shop and per country how street prices develop against the brand's reference price, so the first shop to slide below it is visible early — when a conversation can still fix it.