Guest blog by Chris Dunne from RepricerExpress
Competition on Amazon has never been more intense. Staying ahead of your competitors, retaining sales rank and Buy Box placement are the biggest challenges third-party sellers face. One of the main levers that sellers can use to maximize their sales volume is price. Even major retail chains are getting in on the pricing game by actively price matching Amazon’s prices in order to win the sale.
Sales data on the Amazon marketplace shows that while there are a number of seller metrics that come into play, price matters. Price can have a major impact on your Amazon sales, product visibility and arguably the most key contributor of winning the Buy Box .
And The Buy Box is Everything
In Q1 2017, Amazon.com recorded revenue of $35.71 billion, with around 82% of that going through the Buy Box. With those sort of numbers, it’s easy to see why every seller is clamoring for a piece of the Buy Box.
Once, you’re Buy Box eligible, your placement within the Buy Box can be largely governed by price—which is why anyone seriously selling on Amazon needs to put repricing strategies in place to consistently maintain healthy sales.
Sellers should use a pricing strategy that supports their overall business strategy.
Setting a Pricing Strategy
Just as you have an inventory purchasing strategy (for example, only purchasing inventory where you can make 400% ROI), to win the sale (and not lose money), sellers need to continually ensure their products are priced competitively. A pricing strategy starts with your floor price that you set from your sourcing strategy; if you buy an item for $100 and can sell on Amazon right now at $400, you might set your floor price under $400 to give yourself some room to work with.
When adding inventory to Seller Central, sellers are required to set minimum and maximum (floor and ceiling) sell prices for each product which will ensure they sell an item at the margin they want, and never outside of the range they’re comfortable with. It’s important to note that Amazon can remove your listing if they notice drastic price changes; so be sure to change the price slightly and frequently until you get the price you want.
Staying within this price range, the seller may choose to review a number of factors to choose the price and adjust in order to get the sale:
- Competitor’s Price
- Competitor’s Inventory Levels
- Buy Box Price
- Other Retailer’s Prices
Repricing Software to the Rescue
When you are selling hundreds or thousands of products, repricing each SKU manually to keep up with your pricing strategy becomes impossible, so many sellers turn to repricing software.
Repricing software like RepricerExpress can help sellers to set up a repricing strategy and then automatically manage the prices of their products, adjusting prices regularly to ensure they are well ranked and visible. Once you have a solid pricing strategy in place and set up your software to work for you, price can be one less worry.
Here are some tips so you can effectively use repricing software to execute your pricing strategy:
- Set and commit to a long term pricing strategy
- Take seasonality into account
- Link inventory management and repricing software
- Be selective when targeting competitors
- Don’t race to the bottom!
See how repricing works in 90 seconds.
With an automated and smart repricing software, you’ll be able to execute your pricing strategy and ultimately make more money. For many sellers repricing software has become an essential tool for their Amazon business. If you’re thinking of giving repricing software a go then check out the special offer below.
Sign-up to RepricerExpress 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.