Since releasing the very first automated repricing and inventory management tool for Amazon sellers back in 2002, we’ve watched the marketplace grow by leaps and bounds, almost faster than the speed of light. And, for sellers who’ve managed to keep up, the rewards have been aplenty. In the beginning, the idea of automated repricing was scoffed at by seasoned sellers. Today, any seller not using automated repricing to manage their Amazon prices is, very likely, being left in the dust. Even then, simply changing your price isn’t enough. Here are 5 repricing hacks every Amazon seller should know and use to see gains in sales and profits.
The name of the game is sales. And, to get a piece of that pie on Amazon, keeping your price competitive, your customer experience on point, and your listings visible are key ingredients. Let’s look at some repricing hacks that, once mastered, will yield more sales, at higher profits.
1. Pay attention to your competitor’s fulfillment channel and account performance metrics.
Fulfillment method and seller metrics matter. How much? So much so that Amazon weighs each fairly heavily in their super secret Buy Box algorithm. Here are some key insights:
- Amazon will always give FBA sellers preference for the Buy Box (because they assume it’s the best customer experience)
- The Buy Box is awarded to the best price plus customer experience (not just the lowest price)
- If multiple sellers are eligible and their prices are comparable, Amazon will share the BB in a rotation
So how can I use those insights in my repricing logic?
- If you are an FBA seller and the current Buy Box owner is Merchant Fulfilled, you can price above their current price and capture the Buy Box from them, at a higher profit margin.
- When the Buy Box owner is another FBA seller, rather than undercutting their price and instigating a price war, simply match or very slightly set your price above theirs in order to share the Buy Box in rotation without sacrificing your profits.
- If you are fulfilling items yourself, you’ll need to undercut an FBA Buy Box price significantly to take that position from them. However, if the BB is owned by another MFN seller, use the same logic from above. Either match or slightly price above (especially if your metrics are better). Then you will share the Buy Box rotation without driving prices down.
2. Leverage your sales velocity.
Whether you are selling your own Private Label products, or items with direct listing competition, it’s important to pay attention to your own sales volume, as well as competitor prices. Hot selling items should be inflated for more profit. And items moving slowly should be discounted to find a price point that generates sales. Setting these strategies up to happen automatically when items hit certain sales thresholds is the best way to take advantage of opportunities for increased profit when they happen. Sometimes, you only have minutes. And every penny counts. Small profit increases can add up in big ways over time.
3. Account for your outbound shipping costs, Amazon fees and commissions, COGS, and minimum acceptable profit to create a lower limit that ensures you won’t lose money on any sale.
Many new Amazon sellers forget to factor in both the behind the scenes costs as well as the cost of doing business on Amazon into the price they set for their items. Which, in many cases, results in losing money on their sales. Clearly, one cannot build a successful business in such a manner. Make sure the lower limit you or your tool sets includes all of these factors so that you can sleep easy knowing that any sale you make, even at your minimum price, will result in some profit. Or, at the very least, not a loss.
4. When applicable, compete with or leverage similar items’ prices across different ASINs.
This strategy is largely for the Private Label business model, but can also be used by sellers selling items that exist across multiple Amazon product pages. Use these similar products and their prices to set limits for your own price. This will ensure you remain competitive across the pool of similar items. When buyers search for desired items keywords, your product listing may appear in a list along with many similar looking items sold by other sellers on their own catalog pages. If the items are similar enough, buyers will turn to best price and product reviews to make their final buying decision. Ensuring your price is among the lowest offers and that your listing is visible, will help you capture more sales.
5. Learn to adapt quickly and focus on the bigger picture.
Amazon changes fast. New 3rd party sellers are constantly joining the race, new products are being added every day, Buy Box ownership rotates frequently, seasons come and go, and Amazon is not shy about changing policies, rules, and procedures without any notice. It is imperative that you remain flexible and able to quickly and easily adapt to this constant flux.
Sellers who get stuck in a rut get left behind. What worked last week or last year might not work today. Holding on to what used to work but doesn’t now will drag you down. Letting go of those instances with ease will help you keep stress levels reasonable. And, in this industry, you want to stay light on your feet.
That same flexibility and adaptability is also important in the repricing game. You’ll get more profit than expected on some sales and maybe end up leaving some pennies on the table in other transactions. Don’t get caught up in evaluating every lost opportunity for a few pennies. It will all even out in the end (hopefully on the positive side!). Letting go of the micro to focus on the macro will yield far better business results in the long haul. Remember, Amazon is a marathon, not a sprint.
That’s a wrap for now. Let us know what you think of these 5 repricing hacks in the comments below. Bonus points for leaving your own hacks you’ve picked up along the way. After all, sharing is caring.
Kate has been helping e-commerce sellers navigate and succeed in Amazon’s ever changing landscape for 7 years. From mom & pop stores to multi million dollar brands, she enjoys assisting online entrepreneurs in achieving their goals and breaking records for sales and growth. Kate seeks to share that collective industry knowledge and experience through her writing. In her free time she fronts an indie/pop band, travels the world, surfs, and reads all the books.