Did you know that on average, around 2.5 million price changes happen each day on Amazon – that’s one every 10 minutes! That is Amazon Repricing.
It’s unsurprising though as competition on Amazon has always been pretty fierce, and buyers are hugely influenced by price with it being a critical factor in most purchases.
Most browsers on Amazon won’t even notice these tiny tweaks and repricing strategies as the constant state of flux is extraordinarily subtle and won’t put buyers off.
It’s unnoticeable to buyers, but necessary for businesses to make these tweaks because competitor price changes are inevitable, and repricing can help you remain competitive in a sea of sellers.
Ensuring your products are correctly and competitively priced is one of the most essential elements to your success. After all, price your products too high and no-one will purchase. Price them too low, and you will make sales, but you won’t make any profit!
You must maximise your sales which involves creating a pricing strategy to assist you and ultimately to help you win and keep the Buy Box.
The Buy Box is the holy grail of Amazon! If you are competing against multiple sellers, only one of you can actually snag the Buy Box – in other words, become the most prominent seller, and become the one that is most likely to win each sale.
This is where repricing comes into its own! Amazon repricing is a process whereby you regularly switch your product prices to ensure you stay competitive. This can be done either manually, or automatically with repricing software to give you a real edge over your competition.
It’s all very well switching up your prices though, but of course, you will have set the price of your products based on your costs.
Why Amazon Repricing Strategies are Needed
As you know, your costs will never remain static and will fluctuate due to a range of factors. But it is these costs that ultimately determine how much profit you will make. The significant costs that affect your product prices include:
- The initial cost of your product whether manufactured from scratch, sourced from a distributor or wholesaler, will make up part of your ‘bottom line’. Factors that can affect your bottom line are variations in the cost of research and development, materials, and transportation.
- Supply and Demand: If you are one of the first sellers to introduce a popular product, you will be able to charge an initial high price. However, as more sellers start to enter the market, even if demand remains high, prices will decrease because buyers have more options.
- Amazon Fees: Your Amazon fees will play a massive part in your pricing decisions. You’ll need to take into account your monthly Amazon Pro subscription at £25 + VAT, selling fees starting at 15%, postage fees and of course Amazon FBA fees for storage and fulfilment if applicable.
- Sales and Offers Expenses: There are several occasions throughout the year when you will want to offer ‘deals’ to your customers. In particular, Black Friday, Amazon Prime Day and of course you may schedule seasonal promotions over Christmas to give your sales a boost.
Staying on top of these costs, keeping a close eye on your numbers and pricing accordingly is a strategy which will allow you to stay ahead of your competitors. By knowing your numbers, you can implement repricing strategies more easily!
So, before we look at some repricing strategies, there is one significant point above all others that you should consider.
Evaluate Which Products Require a Repricing Strategy and Prioritise
Products that are ‘sticking’ should be a top priority because you don’t want dead stock languishing in a warehouse for months at a time. You should also look at your highest-priced products with a view to repricing downwards to make them more affordable, therefore kickstarting sales.
By evaluating and prioritising which of your products to work with, you will choose those that can make a real difference to your profits.
But, you must also avoid a ‘race to the bottom’ at all costs!
Yes, consumers are price-aware, and advertising your products at attractive prices will, of course, appeal to many. However, cheap does not mean value and consumers are now wise to this.
It’s easy to check out multiple sellers online with the click of a button, so comparisons are simple to make. Lots of buyers look at far more than just price. Product quality rates highly because rock-bottom pricing psychologically goes hand in hand with shoddy goods.
Shipping time will also be considered as we all want everything delivered yesterday, closely followed by the desire for a high level of customer service.
Buyers will look at reviews and feedback too, and so it’s always possible that although you might have set the lowest price, you will still not be guaranteed the sale.
Remember: You don’t always have to be the cheapest seller.
While you can still do your repricing manually, it’s a bit of a faff! You’ll need to do copious amounts of competitor analysis daily, edit your Amazon listings and be totally on the ball with every aspect of your pricing.
Additionally, if you spend all your time analysing your competitors, you won’t actually find time to grow your business and concentrate on vital marketing aspects.
Luckily, repricing is no longer a manual task. With easy to use repricing software, you can have full control over your repricing strategy and rest safe in the knowledge that you will always remain competitive whatever move your closest competition makes.
Using a repricing software solution such as Repricer.com is a smart move and one that will ultimately ensure you remain competitive without the race to the bottom.
Repricing software, quite simply, changes product prices on your behalf using set strategies – for example, owning the buy box or selling a specific amount of product during a particular amount of time. Market data is automatically gathered and assessed, and then the repricing software sets your prices accordingly.
Once you commit to using repricing software, you must have repricing strategies in place to make sure you get the best results.
10 Repricing Strategies to Raise Your Profits
1. Set a minimum and a maximum price
This is an essential step. Pick the lowest and highest prices you are comfortable selling your product for, and your repricing software will then automatically adjust your prices in your set range depending on what your competitor does.
It will also stop your prices dipping too low. Best of all, the software will automatically increase your price when demand is high, and product supply is low – for example, when your competitor is out of stock.
2. Create your own repricing rules
To do this, you must know your purpose for repricing!
For example, if you want to be super competitive and always price your product against the competitor with the lowest price, you can create a rule that does just that. What this also does is put you in the best position to win the ‘Buy Box’, which as you know, is usually the key to getting the sale.
If your competitor is selling at lower than the minimum price you have set within your minimum and maximum pricing, the repricing software will match your price to the next competitor closest to your minimum amount.
And when you win the Buy Box, you can set your rules to make sure you remain competitive and actually keep hold of the Buy Box.
This is all automated and can be set up by adding precise rules within your repricing software.
3. Choose your competition carefully
Seriously, you don’t want to be competing with everyone. Not only is it a guaranteed race to the bottom which you must avoid at all costs, but there’s also no point.
If you are an FBA seller, you are not in competition with non-FBA sellers anyway, so they can be excluded. By choosing who you compete with, it’s easier to stay profitable and within your target pricing.
4. Make sure you win the Buy Box
You already know that winning the Buy Box will automatically ramp up your sales, and repricing will undoubtedly keep you there. Hence, you must make every effort to get there initially.
To help yourself do the following:
- Choose FBA – Amazon loves FBA sellers as they are in charge of all FBA aspects and know that an exceptional service will be guaranteed.
- Be a saintly seller – a high fulfilment rate coupled with low returns and refunds will help you on your way to the Buy Box.
- Keep a full inventory – if you don’t have any stock you can’t have the Buy Box. It’s as simple as that. So, don’t run out of stock and risk your competitor taking over!
5. Condition counts!
If the products you sell are not brand new, don’t forget to take their condition into account. You cannot – and should not – automate the repricing strategy of a used item against a new item.
6. Data is your best friend
While your repricing software will do the hard work for you, there’s no harm in keeping an eye on the competition yourself. There’s no need to spend vast amounts of time looking at data, but checking in weekly will keep your strategies in focus and allow you to adjust your repricing rules accordingly.
7. Don’t forget the shipping
When you are setting up your repricing rules, minimum and maximum prices, bear in mind the total charges for your competitors’ products. In other words, shipping costs. Repricing software will look at the costs as a whole.
8. Don’t get complacent
If you happen to be the sole seller on a listing, it’s tempting to stop your repricing and set your price high, after all, you have no competitors.
However, if you stick with repricing, you will increase your net profit margins as you’ll know exactly what the market is demanding and be immediately competitive as soon as any competition returns.
9. Compete with Amazon
Yes, you read that correctly. It’s tough but not impossible. As you would expect, Amazon usually wins the Buy Box for its own products, but if you price just below, you’ll get visitors clicking through due to your price even though you don’t have the Buy Box. Taking the Buy Box from Amazon will require quite aggressive pricing, but it can be done!
10. Don’t change your strategies too often
This just wastes time and will prevent you from staying competitive as your pricing will be all over the place and will never have a chance to settle. It’s a better strategy to simply go with the flow of your competitors’ pricing.
Final Thoughts
While there is no specific formula for the most successful repricing strategies, frequent repricing makes perfect sense in a marketplace such as Amazon where one of the main drivers is the price.
It’s time-consuming to do it manually though, particularly if you have more than 50 items in your inventory, so it makes sense to implement a repricing software.
Experimentation is the key to discover which rules and strategies will work for your products. Hence you should A/B test to find the approach that brings the most sales and profit for you.
Ideally, you should pick a competitor within your niche and then perfect your strategy until you find that sweet spot, win the buy box and consistently out-perform them.
Repricer.com is the fastest Amazon repricer on the market and a proud member of Amazon’s Marketplace Developer Council. Try repricing free for 14 days and increase your profits on Amazon, eBay, Walmart, Shopify and more.
Related: What are the Top Features to Look for in an Amazon Repricer?
