The nation is ripe with curiosity and full of expectations for Amazon’s Black Friday and Cyber Monday deals. With the eyes of the world upon it, the largest online retailer in history seems eager to get the show on the road, and it’s already given Prime members a sneak peek at its ‘Lightning Deals’, as we mentioned previously. But how will Amazon sellers cope with the increased competition?
Read what our specialists have to say about pricing strategies this holiday season.
Sales estimates for this holiday season have already started hailing down on retailers. The National Retail Federation came up with an online shopper figure in excess of 130 million this weekend alone, and that’s just in the USA. Considering Survata claims 44% of the people it’s surveyed this year go straight to Amazon when they’re looking for something to buy online, it’s no wonder Amazon sellers are pricking up their ears.
In theory, this is all great news for third-party sellers on Amazon, but how ready are you for what’s to come?
Timing is Everything
Most sellers don’t leave holiday pricing strategies until the very last minute, because they simply can’t afford to rock the boat when the sales are on. Instead, they test and set their prices weeks in advance, waiting for the clock to strike midnight before they can unleash their repricing legions on Amazon.
Whenever it is that you’d like to start putting your pricing strategy into practice this holiday season, our Sellery consultants recommend that you figure it out before sales build up momentum. That’s because a sudden increase in sales velocity can deprive you of the time you’d need to react to simple and easily mendable mistakes, which could otherwise spiral out of control.
If you had some new approach in mind, but never had a chance to test and prepare for it, then the ship has sailed. Stick with your regular pricing practices, namely trying to win the Buy Box, raising or lowering prices when sales take off or drop, etc. After all, a bird in the hand…
Last-Minute Maneuvers
1. A pricing system that’s always worked well for our clients is to offer very generous discounts on a limited number of products to reel in those first curious glances. If you happen to sell private label products, you can sync your discounts with specific holidays.
2. If need be, raise your margins for your best products in between holidays so that you don’t run out of stock, and pull them back down when demand rises. Of course, you need to make sure that you have ample stock for these few but heavily discounted items. Once customers start showing their interest, which is easy to monitor based on pageviews and incoming email, then you can start considering additional discounts, price changes, etc.
3. Keep an eye on your competitors, and move in when they run out of stock. If they sell out just before the high season, you’re in an extremely favorable position, because your own products could then sell for much more than initially expected. Make sure that you’d be able to cover the extra demand if they do.
4. If you have season-specific stock, be sure to push it into the spotlight, even if it means you’d only be including it in your regular pricing strategies. Amazon plans to launch 10 secret deals at the stroke of midnight on Thanksgiving and Black Friday, as well as some app-only deals, so your products could draw in a bit of extra attention if they can be used as add-ons or substitutes for these products.
When the Dust Settles
Be sure to check Lightning Deals, the Gold Box, the Electronic Gift Guide, the Launchpad, and all the other offers and products featured on the Holiday Central page, if you’re an Amazon.com seller. That way, you’ll be ready with similar products in time for the Christmas sale.
There’s now a UK Launchpad as well, so if you’ve had regular orders from overseas, you could do some research into what customers have shown the greatest interest in over the weekend. Then restock or shuffle your inventory depending on whichever fulfillment center or warehouse is closest to the prospective buyer.
In a nutshell, not doing anything special this Thanksgiving weekend isn’t the same as not doing anything at all. Even if your repricer is on automatic pilot, you should keep your eyes peeled and your index finger ready for a flurry of mouse clicks. Let’s just hope Amazon’s data centers are up for the challenge. Happy selling!
Mike and Kate are Sellery and Amazon Repricing experts who are always happy to chat.