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Dynamic pricing is not just a bad nightmare, it actually exists.
While you could have a relatively cheap burger in Korea, you wouldn’t fly there just for a burger, right? However, the same thing is happening with online products and services. Prices vary by location, as people have different ranges of purchasing power. Yet, In the online world, you can change your location easily.
Yep — One double discount, please!
In this article, we will show you how changing your IP location while trying to purchase one of the staples of the modern internet age, could save you thousands of dollars annually —
- travel tickets
- subscriptions
- streaming services
- much more…
Don’t believe it?
Have a look.
How Websites Determine Pricing
Static price tags are close to extinction.
Businesses employ tracking cookies — little trackers in your browser that leaves a virtual breadcrumb whenever you visit their site — and dynamic pricing to set prices for their web visitors.
Dynamic pricing is just as it name sounds, pricing is dynamic and flexible based on a number of extra parameters. Using metadata like the make of your device, geolocation and zip code, the website can determine whether you are from an affluent location, with a raised income level, and will raise prices accordingly.
In some cases, having a foreign IP address indicates you are a tourist and businesses will jack up prices to get some of that sweet tourism revenue.
Here are the components of online retailers dynamic pricing strategy:
Cookies
99% of websites use cookies; to track user activity and also personalize ads to display to individual users based on habits. It also plays a key role in pricing, as it can determine intent.
For instance, a retailer who sees you have previously browsed a certain product and return to it on a later date can jack up the prices, although not necessarily drastically. This is why you should clear your cookies before switching servers for best effects.
IP Address
Your internet service provider’s assigned IP address gives a ton of information to an online retailer, including your device model and real location.
This is how websites are able to ban an entire country from accessing their platforms by collating all the identified local IP addresses and blacklisting the same. Your VPN provider hosts servers in multiple countries, allowing you to simply juggle through virtual countries until you find one that is not banned.
Geolocation
Modern devices are all inbuilt with GPS functionality, while this can be good for finding your way home, it also shines an approximate spotlight on your location on a virtual map.
Retailers see this info, estimate your net worth and spending power, based on regional studies on wealth. All these are automated and your prices will automatically reflect the expectations online service providers place on your wallet.
Zip Code
Inputting your ZIP code while signing up for services can also trigger a pricing change, even after taking measures to even get discounted prices.
Phone Metadata
Your device make — Android or iOS, Mac or Windows — can have subtle influences on just how much you need to pay for apps or streaming services.
For example, subscribing to Apple Music on a non iOS device can have a slightly more expensive cost than registering on a native Apple device.
Effect of VPN on Website Pricing
We will be examining just how much of killing you can make using a VPN, especially a free VPN service. We will consider six key categories:
Netflix Subscription
Netflix avg cost per title for a monthly Netflix subscription vary from $0.127 to $0.361.
Airline Tickets
Booking a flight ticket is probably the biggest opportunity to make a saving with your VPN, as ticket prices can vary as much as $1,100!
Booking a round trip from the Los Angeles International Airport to the Kuala Lumpur International Airport in Malaysia, showed a huge disparity in pricing based on IP location.
Trying a Malaysia server, the price rounded out at $1,335.67, the second-lowest price we found during this study. Trying out a USA server, imagining it would be a similar cost gave a pretty nasty shock — the same flight cost $2,436 for a roundtrip ticket.
A difference of $1,110.7, which could otherwise be spent on other items on your itinerary.
The cheapest deal we found, however, was on a Poland server with a roundtrip ticket costing only $1,305.67.
Apple Music
Two of the biggest streaming service in the world; Apple and Netflix also employ dynamic pricing when fixing prices per region.
Starting with Apple Music, with iTunes being its flagship — subscribing to the standard individual subscription from the United States will cost $9.99 per month.
Users in Europe, however, are forced to pay a higher price to access Apple’s expansive library of music, videos, books and games.
Signing up for Apple Music in the United Kingdom will set you back a cool £9.99 per month, converted to US dollars, this is $13.33 per user.
While this difference might seem minuscule, over the course of a year, this comes to a difference of almost $50 annually. But this pales in comparison to what users in regions like India, Russia and Brazil pay.
Trying to sign up for Apple Music from NordVPN‘s server in China returned a price of $7.39 per month of subscription. Trying a Russian server, we saw the price drop to just $2.75 per month.
However, the biggest savings we saw in our case study came when we tried out one of the Indian servers, the cost of a monthly Apple Music subscription was a laughable $1.75 per month.
In a nutshell, using a VPN, you could go from paying as high as $13.33 per month to as little as $1.75, a monthly saving of $11.58—which translates to $138.96 annually.
Hotel Bookings
Hotels look to make money from customers flying in from all over the world, especially from the so-called affluent countries.
We found that browsing for hotel bookings on USA, Canada, Russia, and China servers on NordVPN returned comparatively similar — the only difference being the fluctuating exchange rate — when looking to book a room at the Beverley Hills Hotel.
A night stay at the 5-Star hotel cost $506 excluding taxes and fees.
However, trying to book the same room at the Beverley Hills from an IP based in Brazil will cost you $696—nearly $200 dollars more than the cost a normal US resident would have paid.
Obviously, the hotel is trying to make quick profits and maybe have to deal with certain logistics, but do you really intend on doing out an extra 200 bucks per night simply because you are a tourist in a foreign country.
Microsoft Subscription
No matter where you are in the world, you probably use a Microsoft product, with the company offering an endless array of valuable apps and services for work, school, and home uses.
However, depending on where you are located these apps can cost quite the penny. Similarly to the majority of service providers today, Microsoft also scales its subscription packages across geolocations, for reasons best known to them.
Our test product is the Office 365 Home, and we will be seeing the disparity in cost depending on your IP address. Using a USA server we are offered a yearly subscription at $99.99; given the topic of this post, you already know there are better offers if we exercise just a little bit of patience.
Moving slightly northward, with a Canada server, the price drops slightly to $87.72.
Migrating to Asia, we start to see real savings—on an Indian server, you can get an Office 365 Home annual subscription for only $72.74 (inclusive of fees and taxes).
The cheapest deal we scored, however, was on a Russian server, where Microsoft offers residents an annual subscription to their service at only $60.22, a difference of $30.77 compared to users subscribing from an American IP address.
On the other end of the spectrum, European countries, again, given the short end of the stick when it comes to paying for services online.
On the majority, if EU servers we tried, we were subjected to a €99.99 per annum cost, that’s $119.86 in American dollars. On an Israeli server, users are given an even stiffer deal, with an annual subscription cost of $131, over twice the cost of the cheapest deal we found on a Russian server.
Creatively using your VPN — cycling through various servers until you get the best deal — can save you upwards of $25, depending on where in the world you are. In some cases, you can cut your costs in half, like Israelis who may choose not to dole out an extra $70 dollars for what other countries get at a significantly lower rate.
Using your VPN, you can make significant savings on any of your Microsoft purchases, whether for business, home, or personal use. Expanding on that, before doing out your hard-earned cash to service providers on the internet for subscriptions, be sure to check out your options.
Car Rental Services
Car rentals are a staple of vacationing; renting cars for a road trip with friends and family, exploring the countryside and taking the sights.
The cost of renting a car is usually a couple of hundred dollars per week, and the extra charges and taxes on
top of that, meaning you are going to be set back thousands of dollars if your trip extends beyond a few weeks.
Surely there must be a way to get some form of discount. Yes.
Using a United States server you can find an economical, four-sitter at around $265 per week without charges. With the extra charges and fees, this rounds out at $400 per week to rent the cheapest available model on rental websites like Kayak.com and Enterprise.
Your best bet for savings is switching to a European server, and we recommend the Spanish servers.
Using NordVPN we found the same deal, an economical, four-sitter, at a flat rate of $245.45—the main ticker being the absence of taxes and fees.
Again, the biggest discounts come on India and Russia servers, where the cost of renting a small, family-friendly vehicle fell at $221 and $236 respectively.
While saving $150 a week in car rental charges may not seem like a lot to someone, those looking to travel and still save money will no doubt be glad to save hundreds of dollars per trip.
How To Effectively Use A VPN
Many know just what a VPN does; masking your IP address, but even fewer know how to make sure your VPN works at 100%.
To get all the discounts you can get from your streaming provider, hotels, and car rental services, you need to follow a very easy guide to clearing your data and starting every session on a clean slate.
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- Ensure your internet connection is strong
- Start your VPN before launching your browser
- Disable website trackers in browser options
- Surf the web
- Clear your browser history
- Clear cache and cookies
- Close browser.
- Disconnect from the old server and connect to a new one.
The key is clearing the breadcrumbs you have left to websites stored on your browser cache.
Do this, and every time you connect to a new server, you are essentially a new, unidentifiable person.
Avoid falling for the exorbitant fees websites, sometimes, arbitrarily assigned based on what region of the world you are checking in from.
Using a VPN, we were able to save as much as a thousand bucks on a roundtrip flight ticket, which would have undoubtedly left a heavy toll on already lean pockets
In this economically fragile world we should take discounts everywhere we can. The best part of this is, the vast majority of these are completely legal, and the rest are simply grey areas companies choose to ignore.
What else could you do with a VPN? Learn from: How To Use a VPN: Ultimate List (97+ Ideas)
The research was conducted with NordVPN.
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