Using the right repricing strategies for your goals as an Amazon seller are crucial in your path to online success. That's because constant competitor price changes are an inevitable part of selling.
Amazon itself changes its prices on the items it sells millions of times each day.
It used to be a luxury to use an automated repricer. But the ever-growing amount of third-party sellers and listed products has shifted repricing strategies into a must-have part of every seller's business plan.
Even when you are the only seller of a specific product, repricing should be part of your core Amazon sales strategy.
So, how often should you revisit your repricing strategies to stay competitive?
The answer depends on your business model. By following these best practices, your repricing methodology will get exactly where it needs to be.
But first, a quick primer on the differences between handling your repricing strategies manually and with an automated repricer.
Managing your repricing strategies manually
You've surely heard the old adage, "don't work harder when you can work smarter."
Amazon repricing manually versus with automation software is a prime example of it at play.
Sure, you can manage your repricing strategies manually, either via Amazon Seller Central or with repricing software. But this is you working much harder than need be.
The problem with manual repricing is that you have to slog through your listings one at a time. Then, you have to slog through your competitors' listings -- one at a time.
You have to check boxes, make calculations, and input results. And errors...well, errors can easily happen and lead to really unexpected surprises, like you selling at a loss.
Unless you're okay with the possibility of making mistakes, you must perform the manual repricing process slowly and carefully. Human error is very possible.
If you like to have a high degree of control, you do get that with manual repricing. But, the job itself is tedious and time-consuming.
Some expert sellers will be so blunt as to call manual repricing impractical, if not impossible, with numerous listings.
Unless you list ten or fewer items, keeping up with Amazon and all the third-party competition will burn you out. Fast.
Using a repricer makes manual repricing somewhat easier by displaying your competitors' prices within the software. But the time it takes to constantly adjust your prices in relation to your competition will still drain your energy and patience quickly.
Managing your repricing strategies with automation
The alternative is to use automated repricing software to manage your Amazon repricing strategies. This dramatically reduces the time and effort you need to stay competitive, and allows you to do so even in your sleep.
Intelligent repricing allows you to move your prices up AND down in response to competition and relevant trends.
When starting with an automated repricer, the following eight repricing strategies are vital to think about.
Basic repricing strategies for Amazon sellers when using automation
1. Set Minimums
To avoid any risk you must set minimum prices for your merchandise. This is essential if you use automated repricing software to ensure that the software doesn’t drop below your predetermined threshold. Even if you adjust prices manually, keeping track of what the lowest price you’re willing to sell for allows you to adjust your prices with confidence.
2. Set Maximums
Set both minimum and maximum prices. A good repricer lets you set maximum prices which can be used in many scenarios. For example, a seller may choose to jump to their maximum price when competitors drop off of a listing. This grants the opportunity to gain a greater profit margin. In another instance, when a listing reaches its minimum price, a strategy can have the price go back to the maximum price.
3. Customize Your Competition
A common misconception about automated repricers is that they drop your price in order to get the sale. This is a completely avoidable circumstance. The “race to the bottom” can be sidestepped by excluding competition that would drive your price down. For example, if you’re an FBA seller on a listing, excluding non-FBA sellers with lower seller ratings—which would most likely cause your price to drop—is one way to keep your listing’s price steady while still capturing sales.
4. Shipping Counts
Always include shipping when you reprice. Amazon shows listings according to both the shipping and base price of an item. FBA merchants are considered to have free shipping with Prime. However, when you reprice your listings, you should consider the total prices charged by competitors—that includes shipping. A repricer will take your competition's total prices (including shipping) into consideration when repricing, therein eliminating the manual work.
5. Focus on Condition
Consider item condition when pricing. If you sell used goods, be certain that your used price isn't higher than that of like-new items. Similarly, price like new items higher than those which are merely in good condition. Or, simply choose to compete only with those other items that fall into the same condition type as your own.
6. Reprice When You're the Only Seller
When you are the only seller on a listing, it may be tempting to set your own price or disable repricing for that item. However, using a repricer even when you are the stand-alone seller will increase your profit margins by keeping you aware of what the market is demanding, and keep you competitive as soon as competition becomes present.
7. Win the Buy Box!
The Amazon Buy Box is the most coveted real-estate for an Amazon seller. In order to be eligible for it, sellers must make sure several factors—including price—are up to the Buy Box requirements for a chance to hold its position. Among the top criteria, landed price (base price plus shipping), fulfillment method, shipping time, and seller rating, must be well established and maintained for the best chances at winning the Buy Box. Something worth noting is that regardless of these factors, any seller competing for the Buy Box must have already achieved Featured Merchant status. FBA products are automatically featured and eligible for the buy box.
8. Compete with Amazon
Speaking of the Buy Box, Amazon typically obtains the Buy Box when they are a seller for a particular listing. If Amazon is your competitor, you're automatically under more pressure. You may be able to price just below Amazon so potential buyers click on your listing to get that price, or wait for Amazon to sell off all of its stock. When it does, you may be able to seize the Buy Box. It is possible to take the Buy Box from Amazon in almost any category but you will need to get very aggressive with your pricing.
The bottom line on repricing strategies
There's no magic formula for successful repricing strategies. But with experience and experimentation, you'll learn what works for you.
Be sure to test repricing strategies until you find what's best for your business and each type of product sold.
A/B test strategies against each other within a specific realm of products and chose the strategy that yields the most sales and profit in a particular time-period.
Pinpoint the specifications of your ideal competitor within a category, and tailor your strategy to outperform them.
Once a sweet spot is found, maintain your strategy. Don't change prices unnecessarily as a knee-jerk reaction.
Changing your strategies too often wastes time and actually prevents you from staying competitive. Following the flow of competition is your best bet.