Companies such as Amazon and Walmart change their item prices millions of times each day. Advances in technology has made price comparison and price optimization easier than ever. And, it’s no longer a luxury to use an automated repricer.
More and more third-party merchants on Amazon are choosing to move from a manual pricing strategy to automated repricing software such as RepricerExpress to keep their prices competitive. Even small sellers.
Getting your pricing strategy right is one of the most important parts of selling online and especially on Amazon, where prices are changing constantly. But, it is also one that is often miscalculated and under-optimized.
Manual or automatic
There are two ways you can manage your prices on Amazon. Manually or automatically using a repricer. The former is suitable if you’re a casual seller with a small number of SKUs and don’t mind dedicating hours of your week checking your competition and manually updating your prices. For most serious sellers, an automated Amazon repricer is an essential tool for their business.
The number one reason that people switch from manual to automatic repricing is time. There’s a famous quote, “money can buy anything except time”, but with an automated repricer, that is exactly what you’re buying.
As manual repricing is time-consuming and monotonous, there is also an increased chance of pricing errors due to human error. Automated solutions have safeguards in place to stop this happening.
Related: 15 Reasons People Choose Repricing Software
Free up time and compete better
Automated repricing frees up time from your busy schedule. You’ll have more time to spend improving other areas of your business or simply relaxing with friends and family.
The number one reason why people don’t use repricing is they (wrongly) believe it is a race to the bottom. It’s not. A good repricing solution, such as RepricerExpress, will actually encourage sellers to increase their prices when the circumstances are right.
For example, when your competitor(s) sells out or when your metrics are superior to other sellers and you can squeeze a bit more profit out whilst retaining your share of the Buy Box.
Understand all your costs
Before you start using repricing software, you should understand all your costs. As, when you get set up, you’ll be required to enter a minimum price for your listings. Even if you’re repricing manually, this is worthwhile. Consider all your costs and note the minimum price (including shipping) you’re prepared to sell your product at so you’re making a profit.
It’s also important to set max prices for all your listings. Your max price should be realistic and will kick in when certain scenarios arise. For example, some sellers will choose to reset to max whilst they are sleeping, knowing if they do get a sale, it will be a profitable one. And, if you have a ridiculously high price, you run the risk of being penalized by Amazon for pricing a product above MSRP—Amazon will delist products that have max prices outside what it considers a reasonable price.
Decide who you want to compete with
There are many factors you can compete with other sellers on, including fulfillment, seller rating, Buy Box Eligible status and more. A good repricer will have competition settings which let you decide who you want to compete with and how.
For example, you’ll easily be able to avoid competing with sellers who want to engage in a price war/race to the bottom. And, if you’re an FBA seller you may want to exclude certain categories of sellers, such as those with poor metrics and using Merchant Fulfilled Network (MFN).
Your competitor could be the current Buy Box price, a specific seller, Buy Box Eligible merchants only or the lowest priced listing. You might choose a ‘price-below’ competitor strategy if you’re looking to avoid Amazon FBA long-term storage fees on the 15 February or 15 August or looking to create space for new products.
Setting a price just below the Buy Box owner’s price by a specific amount or percentage is a strategy worth testing. Somewhere around the 2.5% mark is a common strategy used by sellers and a smart one if they’re aiming to win the Buy Box. Some sellers will simply choose to match their competitor’s price.
Whilst, another option is to price above your competitor, again, by a specific amount or percentage. If you’ve got great seller metrics, then you may want to consider pricing above the Buy Box price. Strong sellers can get away with pricing 3%-5% higher and still get sales and a healthy share of the Buy Box.
If you’re selling used goods, ensure your price is below the ‘like-new’ price. And if you’re selling ‘like-new’ goods, ensure this is below the new price. I have seen numerous examples of this on Amazon. It’s not going to help your sales.
In certain scenarios, you’ll also be competing with Amazon itself. This is very difficult but not impossible. If your price and seller metrics are top-notch, then you’ll win your fair share of sales. Plus, if Amazon sells out, as it often does at busy times of the year, then ensure you’re nicely positioned to capitalize.
Aim for the Buy Box
With close to 90% of all sales on Amazon going through the Buy Box, every seller should be aiming to win a share of it. There are many factors that go into Amazon’s Buy Box algorithm, not just price.
Something worth bearing in mind is that a low price by a third-party seller means fewer fees for Amazon. Amazon wants sellers to have competitive prices and excellent seller metrics. Established sellers who have shown they can be relied upon will have the best chance of winning a spot in the much covered Buy Box.
Here are five quick ways your can increase your Buy Box chances.
- Price competitively.
- Excel at shipping.
- Keep stock available.
- Provide great customer service.
- Protect your seller rating.
Wrapping Up
Every seller is different so there’s no one-size-fits-all repricing strategy but we recommend you prioritise profits over sales if you’re well established. If you’re new to selling on Amazon, then the opposite may be true, whereby you may have to sacrifice profits to win more sales against well-established sellers who have much better seller metrics. It’s important to experiment and see what works for your business. Try A/B test strategies. Match your rules with your business goals and find out what strategies reap the most profit.
Find that sweet spot and you’ll be well on the road to success. However, with repricing, it’s advisable to not simply, set and forget it. You should be checking regularly and looking to make improvements along the way, as things change.
Special Offer
With RepricerExpress you get a super-fast repricing solution that is really easy to setup and works across Amazon and eBay. Plans start at $50 and include a free 15-day trial for you to try out and see if it works for your business. Sign-up today using the promo code “REX10”, and you can enjoy 15 days of Amazon repricing for free (no credit card required), then get a 10% discount on your first month’s subscription.
If you have any further repricing queries, get in touch using the live chat feature on our site or via profit@repricerexpress.com and one of our great customer support team will get back to you ASAP.
