When customers browse Amazon for items they want to buy, they usually weigh their options to fit their budget. Since almost every industry has multiple stores, they would, more often than not, prefer the cheapest item. That as long as the quality is relative to the other options.
That only goes to show that customer-friendly pricing is imperative to ensuring a successful Amazon business. After all, competitors are changing prices constantly to stay relevant to their existing and target customers. Even Amazon renders price changes on the millions of items it sells every day. You should do that as well.
In the past, it’s just easy to use an automated repricer. With the proliferation of third-party sellers, however, it’s now critical to consider repricing strategies as essential to your business plan. It does not matter if you are the only seller of a particular product. Make sure your Amazon seller strategy integrates repricing to its core.
So, when should you be changing prices to remain competitive? That depends on the current business environment and your business model. What we’ll tackle in this article though, are the best practices you need to implement to do your repricing strategy properly. Before delving on that though, let’s have a quick overview on what differentiates automated repricing with manual repricing.
Managing Your Repricing Strategies Manually
When you were just starting, you must have been managing prices manually using Amazon Seller Central or with a repricing software. And you must have noticed that as your business grows and Amazon turns more and more competitive, manual pricing is becoming much harder than it used to be.
That holds particularly true as manual repricing requires you to slog through your product listings one at a time. Following that, you need to go over the listings of your competitor and assess these per item. You have to review boxes, do intensive calculations, and record results. And mistakes. These are typical scenarios when doing things manually. Often, it leads to unexpected consequences, like losing sales.
If you want to avoid these mistakes, you need to allot more time so you can properly do the repricing process manually. But what if you’re chasing time and those demands are rapidly soaring? How can you cope?
Sure, manual repricing allows you to have a high degree of control on your product listings and rates. Using a repricer even makes it far easier to display your competitors’ prices within the software.
However, that entails a lot of time and effort, especially if your store is growing and speed becomes a necessity. Some expert Amazon sellers consider manual repricing impractical or impossible, especially for those with many listings.
Managing your Repricing Strategies with Automation
If you don’t want to go with the hustles and bustles of manual repricing, then you should gradually transition to automated repricing. That will unload you of the extra time and resources you devote just to ensure you’re on the line of market profitability. It’s like the concept of passive income that established money-making machines generate you cash while you’re napping or spending holidays somewhere.
With intelligent repricing, you can accurately adjust your pricing aligned with market movements and changes. Mind you. That’ll be far less hassling when you’re utilizing an automated repricer.
In doing so, here are the best practices you should keep in mind to optimize your automated strategy. These are also the fundamentals you should adequately implement.
Fundamental Practices for Amazon Sellers using Automation
1. Set Minimums
When you are just starting, it’s essential to set minimum prices for your Amazon store. That helps avoid potential risks and to ensure that the software does not fall below your established threshold. As long as you’re aware of the lowest possible price you can sell for, adjusting the prices doesn’t come with a lot of pressures.
To set minimum prices, align it to your desired minimum profit since that is the easiest and most effective way. In other words, apply a profit-based minimum amount. Although not all automated reprices have this kind of feature, the ones that do make it way much easier to process the set of bulk minimum and maximum prices.
2. Set Maximums
It’s important to establish not only the minimum but also the maximum prices. Take note. An optimized repricer provides you with maximum prices that are applicable regardless of the situation. For instance, you can shift to your listing’s maximum amount when competitors run out of stock or remove the same listing.
That allows you to earn more profits at less cost. Another example is when a product listing reaches its minimum price, you can use automated pricing strategies to jump to the maximum price.
3. Customize Your Competition
A lot of Amazon sellers fall into the common misconception that automated repricers lower their prices to get the sale. It’s no wonder why some of them eventually stumble into losing ground that they would have to strategize all over again. You don’t have to fall into that mistake.
Here is the point. You can avoid falling flat to the losing ground by disregarding competition that would drop your price. For instance, if you’re an FBA seller on a product listing, excluding non-FBA sellers with more unsatisfactory seller ratings – which would ultimately drop your price – is an ideal way to ensure that your listing’s price is steady as your store generates more sales.
Good thing, some repricing platforms have features that let you remove competitors with reference to their logistical performance. That leads into optimizing your store’s performance which in turn, converts to more earnings.
4. Shipping Counts
When devising your repricing strategy, don’t forget to consider shipping. After all, Amazon’s listings display products based on their shipping and the original pricing. Sure, FBA merchants are given free shipping as long as they are Prime qualifiers.
But when repricing your products, make sure that you take into account the overall rates of your competitors including shipping fee. An automated repricer will consider your competition’s overall costs (including shipping), thereby eliminating the manual work that you would have needed to pour out doing so.
5. Focus on Condition
Although your goal in using an automated repricer for your Amazon store is to price your products efficiently, you should never sacrifice quality or the listing’s condition. Even if you have the most competitive price but then deliver a poor-quality product, your customers won’t like it, and you’ll lose subscribers. That is why always align pricing with the condition of your product.
For example, if you’re selling secondhand goods, make sure that your price is lower than brand new items. Likewise, set higher prices for newer items compared to items which have long been overdue. If not, just focus on selling products that fall into the same quality or conditions as your own.
6. Reprice When You’re The Only Seller
Admittedly, it becomes tempting to set your price or disable repricing for a particular listing if you’re the only one selling that item. But do note this. Even if you are a stand-alone seller, consider using a repricer to boost your earnings. That is because you become aware of what the market currently demands and, therefore, prompting you to remain competitive as soon as competition arises.
7. Aim the Buy Box Button!
For every Amazon Seller, the golden accolade is the Amazon Buy Box. To become Buy Box eligible, you have to consider a variety of factors, such as proper pricing. Likewise, ensure a positive seller rating, efficient shipping system and fulfillment method, as well as competitive pricing. That gives you a higher chance in hitting the coveted Buy Box.
Here is a pointer you should know, though. Every Amazon seller should have qualified for the Buy Box Eligible Status when gearing to hit the Buy Box. That is because items under the FBA listing are normally showcased and displayed in the Buy Box.
8. Compete with Amazon
It’s a more challenging endeavor when Amazon has the Buy Box for a particular product you are trying to sell. Unfortunately, Amazon has its grip on almost every significant niche out there, so every major seller is, in fact, under automatic pressure. But there are ways for you to navigate through that.
For example, you can lower your price below that of Amazon, so prospective customers choose your listing. Or, you can wait for Amazon to sell off all of its stock before you can seize the opportunity of winning the Buy Box. Yes, a lot of sellers, even beginners, were able to take the Buy Box from Amazon in different categories. And you can do that as long as you are aggressive with your pricing.
Concluding Points on Repricing Strategies
Albeit no exact recipe exists for a successful repricing strategy, specific experiences and experiments will lead you into learning what works best for you and your Amazon store.
Make sure to test every repricing strategy you deem fit until you find what is best for your situation and every product you sell. If an approach is putting you on losing ground, discount it right away. If finally, M strategy is driving your sales, then focus your attention on improving it until you build a sustainable pricing system that yields the most sales and profit within a time duration.
Also, it’s imperative to have a keen understanding about your given competitor so you can properly identify and implement approaches that would anchor you to the winning ground. Once you’ve discovered the sweet spot, keep up with your strategy. Avoid drastically changing prices as a result of emotional reaction.
Take note. Changing your pricing strategies too often results in too much valuable time lost. That will deviate you from remaining competitive. Your best bet still anchors to following your competition.