Did you know that the prices for each product on Amazon change constantly? Our 12 Amazon pricing strategies are the essential keys to opening competition doors at that point. For instance, If a seller on Amazon wants to keep up with the competition, they need to update their listing’s prices to stay competitive regularly.
Each way requires a thought-out strategy, whether the seller makes the changes manually or uses an Amazon repricer tool. Notably, each year it is becoming less possible to sell on Amazon manually without a repricing solution effectively.
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Why Your Amazon Pricing Strategy is Important?
Repricing must be critical to your Amazon seller strategy because your costs before obtaining a profit will constantly change.
Costs that will change beyond your control include your product’s initial price, Amazon fees, and supply and demand fluctuations.
Your product’s initial cost will change depending on your wholesaler because of research costs, raw material costs, and transportation expenses.
When demand is high and supply is low, you have more authority in dictating prices. But once the supply increases, your prices will need to become more competitive.
You must consider Amazon’s Pro Subscription fee, storage and fulfillment costs, and others.
Since these prices will continually change depending on external circumstances and affect your bottom line, you must be prepared to reprice your products accordingly and strategically. In this way, you can use pricing strategies to garner the most sales and revenue.
Manual Vs. Automatic Pricing Strategy
You can manually reprice your products using Amazon Seller Central or using an Amazon repricer tool. However, you create a lot of unnecessary work for yourself when repricing manually.
This unnecessary work will entail working through each of your listings individually, first to recall which strategy is necessary and then updating each price. Not only must you complete these tasks, but you must also check how your competitors are repricing their products, make calculations, import results, and more.
As human beings, we also will 100% make errors beyond our control. It is only human to make errors. However, errors in this business can result in costly mistakes and losing sales opportunities. Alternatively, you could even be selling the products that you’ve spent hours meticulously repricing at a loss!
Therefore, manual repricing to win the buy box cannot be reliably done by a human in 2021. An intelligent AI-based repricer, however, will help you significantly streamline the process.
In this blog, you will learn the best Amazon repricing strategies to effectively compete with fellow sellers on Amazon. Whether you have one listing or more than a thousand, these strategies will help you optimize your performance and maximize your sales.
The Top Amazon Pricing Strategies
Here are the top strategies to help you stay competitive and win the buy box against fellow sellers.
#1. Run Sales for Special Occasions
Special occasions like Easter, Christmas, Thanksgiving, and other holidays are prime times to reduce your prices and run sales to drive your product sales higher than usual.
#2. Continue Repricing Even When You’re the Sole Seller
When you’re the only seller, your repricer should increase your price while keeping the buy box. But it would be best if you still repriced to stay competitive when another seller eventually does start selling the same product. Using this strategy, you can maintain your “win” on the buy box at the optimal price. It is almost important that your repricer takes into account available inventory, so you do not run out of stock when the sole seller.
#3. Match the Condition with the Listing
If you sell products that aren’t fresh or new, do not set your Amazon pricing strategy using an FBA repricer to compare it with a new item. If you sell refurbished or used products, ensure your items are not priced higher than new versions.
In addition, a good rule of thumb is to compete effectively with items that are in the same category as yours. So, if you sell used Nike Sneakers, you want to compete with other used Nike Sneakers.
#4. Look at Your Data Regularly
While an AI-based repricer can undoubtedly do the bulk of your repricing work, you are still the business owner! Therefore, you must check in with your data points and calibrate your Amazon pricing software accordingly at least once a week
#5. Avoid Being the Cheapest Seller in the Listing
Contrary to popular opinion and notion, you do not need to be the cheapest seller to succeed and win the buy box! This race to the bottom might waste your time and money.
While cheap products are appreciated and bought, customers are also wary of low-quality products. Therefore, they can also look at other sellers simply by clicking a button. Many buyers consider factors outside the product’s price.
High-quality customer service, faster shipping, delivery timelines, and premier product reviews will help you ensure sales even when you’re not the lowest-pricing seller for a product.
#6. Utilize Your Experience by Making Business Decisions
While using an AI-powered Amazon repricing platform is recommended, you must also continue to use your wits and business sense as you engage with selling on Amazon.
The Amazon optimization platform will perform nicely and give you high-quality results when you give it high-quality, informed instructions.
When you have many products on Amazon, you have already garnered the experience you need to make intelligent decisions and understand both competitor and consumer behavior.
You can use previous behavioral trends to predict future ones. You must know when an item is worth trying to sell again and worth it. Additionally, you must know when upselling is your best option to sell an item.
#7. Prioritize Your Repricing Needs
Ensure you have an order in which you want to reprice your products. You will want to target the stock collecting dust in the FBA warehouses first to get them sold faster.
Remember that Amazon will charge you long-term storage fees if your item is there for longer than a full year. This cost is another reason ordering your repricing needs is critical.
Not only do you get to sell your stock in a more timely manner using this amazon pricing strategy, but you also get to avoid paying Amazon’s long-term storage costs.
#8. Customize Your Competition
You will not have to compete with everyone selling a product. Not only will this activity be unnecessary, but it will also be a waste of your energy. As an FBA seller, you’re not competing with non-FBA sellers. Therefore, you can exclude them from your competitors.
When you carefully choose who you compete with, you will find it far easier to maintain profits and reach your targets.
#9. Consider Shipping Costs
You must consider shipping costs when you reprice your products on Amazon. Amazon will display your items according to their price and shipping requirements. While FBA merchants attain free shipping using Prime, your competitors will be repricing to include shipping costs.
The best Amazon repricing software will analyze your competitors’ total prices with shipping costs included. The software will then reprice your product accordingly, minimizing the manual aspect of repricing in this way.
#10. Win the Buy Box
The most convenient way to garner the most sales from a listing is to win your product’s buy box on Amazon. You must keep in mind that winning the buy box means you are the “ultimate” seller on the listing, depending on your performance and other factors.
Choose the Best Fulfillment Method for You
Fulfilled by Amazon, or FBA, sellers are already more likely to win the buy box because Amazon is fulfilling the product and is therefore running a significant part of the operation. Therefore, Amazon will want to ensure its customers have a fantastic shopping experience.
Another option is FBM or Fulfilled by Merchant. In this case, sellers will place their products on listings in Amazon and ship their products themselves. In this way, the seller is responsible for fulfilling all their orders instead of Amazon.
While FBM can be an attractive option for products with inherently lower profit margins, it is often considered sub-par due to the streamlined handling, packing, shipping, and other benefits associated with the FBA program.
As a clear bonus, sellers who choose to go with the Fulfilled by Amazon (FBA) program are more likely to win the buy box where their products are listed on Amazon. Being associated with a big brand has its benefits here.
Regularly Measure Your Seller Performance
To ensure you are the “ultimate” seller worthy of winning the buy box, you must regularly check on your performance. Make sure you have low returns, minimal pre-fulfillment cancellations, good feedback, and high ratings. You can discover more about measuring your performance here.
#11. Don’t Be Intimidated When Competing with Amazon
When competing with Amazon, many sellers get intimidated and think it’s not worth it to stay on the listing. The truth is that it is challenging to compete with Amazon, but it’s not impossible.
You would rightfully assume that Amazon naturally wins the buy box for the products it sells. However, pricing your product just below Amazon’s price will result in many users clicking over to your listing for the product. They will click through to your listing in this case, even though you haven’t secured the buy box!
Additionally, you can win the buy box from Amazon using highly competitive Amazon pricing strategies. This feat is challenging, but it can be (and has been) done.
#12. Set Repricing Rules with a Repricer Tool
When using an Amazon repricer tool, it’s important to set parameters for the minimum and maximum prices you’re comfortable setting for your product.
Multimillion-dollar sellers love Amazon repricer tools because they understand one can’t spend most of one’s time analyzing competitors to change listing prices 24/7.
But an AI-based repricing software can do just that, allowing you to focus on growing your business.
See Also: Top 8 Pricing Strategies for Amazon on Holiday Shopping Seasons
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