AI Dynamic Pricing Optimization for Shopify

Modified on Fri, 13 Feb at 9:11 AM

Overview

This n8n workflow automates dynamic pricing for your Shopify store using AI-powered optimization. It fetches product and order data via Streamline Connector, analyzes sales velocity, inventory levels, and optional competitor prices, then uses GPT-4 to recommend optimal price adjustments while enforcing strict safety guardrails.

Key Features

  • Data Integration: Pulls products, inventory, and orders via Streamline Connector endpoints
  • AI-Powered Analysis: GPT-4o analyzes demand signals and recommends prices
  • Safety Guardrails: Margin floors, max change limits, confidence thresholds
  • Dry-Run Mode: Test recommendations without making actual changes
  • Competitor Monitoring: Optional scraping of competitor prices (configurable)
  • Comprehensive Logging: All decisions tracked in Google Sheets
  • Slack Alerts: Real-time notifications for price changes

Architecture

┌─────────────────────────────────────────────────────────────────────────────────────┐ │                              TRIGGER ZONE                                            │ │  ┌──────────────┐    ┌──────────────┐                                               │ │  │ Every 6 Hours │    │ Manual Test  │                                               │ │  └──────┬───────┘    └──────┬───────┘                                               │ │         └──────────┬────────┘                                                        │ │                    ▼                                                                 │ │           ┌───────────────┐                                                          │ │           │    Config     │  ◄── Environment variables & feature flags              │ │           └───────┬───────┘                                                          │ └───────────────────┼──────────────────────────────────────────────────────────────────┘                    │ ┌───────────────────┼──────────────────────────────────────────────────────────────────┐ │                   ▼           DATA RETRIEVAL ZONE                                    │ │  ┌────────────────────────────┐    ┌────────────────────────────┐                   │ │  │ Streamline: Get Inventory  │    │ Streamline: Get Orders     │                   │ │  │ /products/inventory        │    │ /api/order-data            │                   │ │  └────────────┬───────────────┘    └────────────┬───────────────┘                   │ │               └──────────┬──────────────────────┘                                    │ │                          ▼                                                           │ │              ┌───────────────────────┐                                               │ │              │ Merge & Enrich Data   │  ◄── Calculate sales velocity, stock days    │ │              └───────────┬───────────┘                                               │ │                          ▼                                                           │ │              ┌───────────────────────┐                                               │ │              │ Split by Variant      │                                               │ │              └───────────┬───────────┘                                               │ └──────────────────────────┼───────────────────────────────────────────────────────────┘                           │ ┌──────────────────────────┼───────────────────────────────────────────────────────────┐ │                          ▼       COMPETITOR MONITORING (Optional)                    │ │              ┌───────────────────────┐                                               │ │              │ Scraping Enabled?     │                                               │ │              └───────┬───────┬───────┘                                               │ │                 YES  │       │  NO                                                   │ │                      ▼       ▼                                                       │ │  ┌─────────────────────┐   ┌────────────────────┐                                   │ │  │ Get Competitor URLs │   │ Skip Competitors   │                                   │ │  │ (Google Sheets)     │   └─────────┬──────────┘                                   │ │  └──────────┬──────────┘             │                                               │ │             ▼                        │                                               │ │  ┌─────────────────────┐             │                                               │ │  │ Scrape Prices       │             │                                               │ │  └──────────┬──────────┘             │                                               │ │             └──────────┬─────────────┘                                               │ │                        ▼                                                             │ │              ┌───────────────────┐                                                   │ │              │ Merge Paths       │                                                   │ │              └─────────┬─────────┘                                                   │ └────────────────────────┼─────────────────────────────────────────────────────────────┘                         │ ┌────────────────────────┼─────────────────────────────────────────────────────────────┐ │                        ▼          AI PRICING ENGINE                                  │ │              ┌───────────────────────┐                                               │ │              │ Prepare AI Prompt     │  ◄── Build context with all product data     │ │              └───────────┬───────────┘                                               │ │                          ▼                                                           │ │              ┌───────────────────────┐                                               │ │              │ OpenAI GPT-4o         │  ◄── Analyze & recommend optimal price       │ │              │ (JSON Response)       │                                               │ │              └───────────┬───────────┘                                               │ │                          ▼                                                           │ │              ┌───────────────────────┐                                               │ │              │ Parse & Validate      │  ◄── Enforce guardrails                       │ │              └───────────┬───────────┘                                               │ └──────────────────────────┼───────────────────────────────────────────────────────────┘                           │ ┌──────────────────────────┼───────────────────────────────────────────────────────────┐ │                          ▼       DECISION & UPDATE ZONE                              │ │              ┌───────────────────────┐                                               │ │              │ Valid Change?         │                                               │ │              └───────┬───────┬───────┘                                               │ │                 YES  │       │  NO                                                   │ │                      ▼       ▼                                                       │ │  ┌─────────────────────┐   ┌────────────────────┐                                   │ │  │ Dry Run Mode?       │   │ Log Skipped        │                                   │ │  └──────┬────────┬─────┘   └─────────┬──────────┘                                   │ │    LIVE │        │ DRY              │                                               │ │         ▼        ▼                   │                                               │ │  ┌───────────┐ ┌───────────┐         │                                               │ │  │ Update    │ │ Dry Run   │         │                                               │ │  │ Shopify   │ │ Log       │         │                                               │ │  └─────┬─────┘ └─────┬─────┘         │                                               │ │        └─────────────┴───────────────┘                                               │ │                      │                                                               │ │                      ▼                                                               │ │              ┌───────────────────┐                                                   │ │              │ Merge All Results │                                                   │ │              └─────────┬─────────┘                                                   │ └────────────────────────┼─────────────────────────────────────────────────────────────┘                         │ ┌────────────────────────┼─────────────────────────────────────────────────────────────┐ │                        ▼         LOGGING & ALERTS                                    │ │              ┌───────────────────────┐                                               │ │              │ Log to Google Sheets  │                                               │ │              └───────────┬───────────┘                                               │ │                          ▼                                                           │ │              ┌───────────────────────┐                                               │ │              │ Send Slack Alert?     │──► Slack Notification                         │ │              └───────────┬───────────┘                                               │ │                          ▼                                                           │ │              ┌───────────────────────┐                                               │ │              │ Generate Summary      │                                               │ │              └───────────┬───────────┘                                               │ │                          ▼                                                           │ │              ┌───────────────────────┐                                               │ │              │ Final Output          │                                               │ │              └───────────────────────┘                                               │ └──────────────────────────────────────────────────────────────────────────────────────┘

Setup Instructions

1. Prerequisites

  • n8n Instance: Self-hosted recommended (for community nodes)
  • Streamline Connector Account: Get your Shop ID from the dashboard
  • Shopify Custom App: Admin API access with write_products scope
  • OpenAI API Key: GPT-4o access
  • Google Sheets: Two sheets for competitor URLs and logging
  • Slack Workspace: Incoming webhook or bot token (optional)

2. Credentials Setup

Create the following credentials in n8n Settings → Credentials:

Credential NameTypeRequired Scopes
OpenAI APIOpenAIAPI key with GPT-4 access
Shopify Admin APIShopifyread_products, write_products, read_inventory
Google SheetsGoogleSheets API access
Slack APISlackchat:write, channels:read (optional)


3. Google Sheets Setup

Competitor URLs Sheet

Create a sheet named "Competitors" with columns:

skucompetitor_namecompetitor_url
SKU-001Amazonhttps://amazon.com/dp/...
SKU-001Walmarthttps://walmart.com/ip/...

Price Changes Log Sheet

Create a sheet named "Price Changes" with columns: | Timestamp | Product | Variant | SKU | Old Price | New Price | Change % | Confidence | Reasoning | Status | Demand | Inventory | 30d Sales |


4. Configuration

Edit the Config node to set your values:

const config = {  // Streamline Connector  SHOP_ID: 'YOUR_SHOP_ID',  // From Streamline dashboard    // Pricing Rules  MIN_MARGIN_PERCENT: 30,       // Minimum margin (adjust to your business)  MAX_PRICE_CHANGE_PERCENT: 10, // Maximum single adjustment ±10%  MIN_CONFIDENCE_THRESHOLD: 70, // AI must be 70%+ confident  MIN_PRICE_DIFF_PERCENT: 2,    // Minimum change to trigger update    // Feature Flags  DRY_RUN: true,                // START WITH TRUE - test first!  ENABLE_SLACK_ALERTS: true,  ENABLE_COMPETITOR_SCRAPING: false, // Enable when ready    // Sheet IDs  COMPETITOR_SHEET_ID: 'YOUR_COMPETITOR_SHEET_ID',  LOG_SHEET_ID: 'YOUR_LOG_SHEET_ID',    // Slack  SLACK_CHANNEL: '#pricing-alerts',    // Filtering  PRODUCT_TAG_FILTER: 'dynamic-pricing',  // Tag products to include  MAX_PRODUCTS_PER_RUN: 50 };


5. Product Tagging

Tag products in Shopify with dynamic-pricing (or your chosen tag) to include them in optimization. This prevents accidental price changes on products you want to manage manually.


Safety Guardrails

The workflow enforces multiple layers of protection:

1. Margin Floor

MIN_MARGIN_PERCENT: 30  // Never drop below 30% margin

AI prompt includes this constraint and validates output.

2. Maximum Change Limit

MAX_PRICE_CHANGE_PERCENT: 10  // Max ±10% per run

Prevents dramatic swings even if AI recommends them.

3. Confidence Threshold

MIN_CONFIDENCE_THRESHOLD: 70  // Require 70%+ confidence

Low-confidence recommendations are logged but not applied.

4. Minimum Change Threshold

MIN_PRICE_DIFF_PERCENT: 2  // Ignore tiny changes

Avoids unnecessary updates for insignificant differences.

5. Dry Run Mode

DRY_RUN: true  // Log recommendations without updating

Always start with DRY_RUN: true to validate AI behavior.

6. Product Filtering

PRODUCT_TAG_FILTER: 'dynamic-pricing'

Only processes explicitly tagged products.


AI Prompt Engineering

The workflow builds a comprehensive prompt for GPT-4o including:

## Product Information - Title, SKU, Current Price - Compare-at Price (if set) - Inventory Quantity - 30-Day Sales Volume - 30-Day Revenue - Days of Stock Remaining - Demand Signal (HIGH/MEDIUM/LOW/VERY_LOW) 
## Competitor Prices (if available) - Amazon: $X.XX - Walmart: $Y.YY 
## Pricing Rules (MUST FOLLOW) 1. Minimum margin: 30% 2. Maximum single change: ±10% 3. Premium positioning constraints 4. Demand-based adjustments 
## Output Format {  "suggested_price": <number>,  "price_change_percent": <number>,  "confidence": <0-100>,  "action": "increase" | "decrease" | "no_change",  "reasoning": "<brief explanation>",  "revenue_impact_estimate": "<projected impact>" }

Testing Checklist

Phase 1: Dry Run Testing

  • [ ] Set DRY_RUN: true in Config
  • [ ] Run workflow manually
  • [ ] Check Google Sheets log for recommendations
  • [ ] Verify AI reasoning makes sense
  • [ ] Confirm safety rules are being enforced
  • [ ] Review Slack alerts (if enabled)

Phase 2: Limited Live Test

  • [ ] Tag only 2-3 low-risk products with dynamic-pricing
  • [ ] Set DRY_RUN: false
  • [ ] Run workflow
  • [ ] Verify Shopify prices updated correctly
  • [ ] Monitor sales impact over 24-48 hours

Phase 3: Gradual Rollout

  • [ ] Increase to 10-20 products
  • [ ] Monitor for 1 week
  • [ ] Analyze revenue impact in log sheet
  • [ ] Adjust thresholds if needed
  • [ ] Scale to full catalog

Troubleshooting

Common Issues

IssueCauseSolution
No products processedTag filter not matchingCheck PRODUCT_TAG_FILTER matches Shopify tags
AI returns no_change for everythingConfidence too lowLower MIN_CONFIDENCE_THRESHOLD or improve data quality
Rate limitsToo many productsReduce MAX_PRODUCTS_PER_RUN or increase schedule interval
Shopify update failsMissing credentialsVerify Shopify API credentials have write_products scope
Empty competitor dataScraping disabled or no URLsEnable scraping and populate competitor sheet

Error Handling

The workflow includes continue-on-error patterns. Check the execution logs in n8n for detailed error messages on individual products.


Cost Estimation

ComponentCost Per RunNotes
OpenAI GPT-4o~$0.01-0.05/productDepends on prompt size
Streamline ConnectorIncludedPart of subscription
Google SheetsFreeWithin limits
n8nVariesSelf-host or cloud pricing

Example: 50 products × $0.03 × 4 runs/day = ~$6/day


Recommended Schedule

Business TypeScheduleRationale
High-velocity (fashion, electronics)Every 4 hoursRapid market changes
Standard retailEvery 6 hoursBalance freshness vs. cost
B2B / slow-movingDailyLess price sensitivity
Seasonal peaksEvery 2 hoursMaximize opportunity

Extending the Workflow

Add Manual Approval Gate

Insert a Slack interactive message before the Shopify update:

// Add after "Valid Change?" node // Slack: Send message with Approve/Reject buttons // Webhook: Wait for user response // If approved: proceed to update // If rejected: log and skip

Add Google Trends Demand Signal

// Insert before AI Prompt // HTTP Request to Google Trends API // Extract search volume for product keywords // Merge into demand_signal calculation

Add Inventory Reorder Alerts

// After final output // If days_of_stock < 7 AND demand_signal = HIGH // Send Slack alert: "Low stock warning for [product]"

Support

  • Streamline Connector Docs: https://streamline-connector.com/docs
  • n8n Community: https://community.n8n.io
  • OpenAI API Docs: https://platform.openai.com/docs

Version History

VersionDateChanges
1.0.02026-02Initial release

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