Amazon Pricing Strategy Guide for Maximizing Sales Volume
Competing effectively on price is a delicate art and science, especially when it comes to maximizing your profit margin. There are a few different ways to reprice your products: manual repricing, rules-based repricers, and algorithmic repricing tools.
If you’re using a third-party repricing tool, you’ll enter your Amazon Seller ID during setup. This allows the tool to import your account and listing information from Amazon. The tool will sync with your products via an integration with Amazon. This notifies your repricing tool when there are competitive pricing changes for any ASIN you have listed. Your Amazon repricer then makes adjustments automatically.
We’ll skip the technical details here, but it’s good to have a general understanding of how Amazon repricers work. Below we’ve outlined four options for repricing your ASINs.
Nội Dung Chính
Manual Repricing
If you only have a couple of SKUs or are just getting started selling on Amazon, manual repricing might work for you. To get started, go to the Pricing Dashboard in Seller Central to see if you are not getting the Buy Box for any of your ASINs. If you are getting the Buy Box, great! If not, you’ll need to do a little research to see how other sellers are pricing the item. Then you’ll adjust your pricing. You can do this by updating one item at a time on the Manage Pricing page. You also have the option to quickly price match the current lowest price. (Of course, this may result in lost profits for you, based on a variety of factors discussed elsewhere on this page.) You can also manually change your price on the Manage Inventory or Pricing Health pages.
To manually manage repricing effectively, you or one of your employees will need to go through this process several times a day. It involves a lot of data entry and calculations to determine minimum and maximum pricing. Keeping focused on the bottom line can be tough if you get involved in a price war and want to “win” against your competitor. There is also a lot of room for error, especially as you get tired. In short, manual repricing might work for a little while but it can quickly become a challenge, which is why many Amazon sellers turn to automated solutions.
How to Use “Amazon Automate Pricing”
You can set repricing rules within Seller Central using the Amazon Automate Pricing functionality, which is included for sellers with a Professional selling account. Amazon automated pricing is pretty simple: choose the pricing rule that suits your business objectives and select the ASINs you’d like to enroll in Automate Pricing.
Amazon Automate Pricing generally works by lowering your price beyond those of your competitors. That’s great for customers, but not for your bottom line. Automate Pricing does an excellent job of lowering prices, but it won’t help you maximize your profit. It is also less nuanced than an algorithmic repricing tool.
In October of 2022, Amazon made it possible to set minimum and maximum prices for your listings in bulk, which was a nice (and much-needed) update. You may now also use the tool to increase your price when its external price increases and there are no other offers for the same product in Amazon’s store that meet your rule criteria.
Third-Party Rules-Based Pricing Tools
Rules-based pricing tools allow you to select pricing rules that align with your goals. By automating the process of repricing your ASINs, these tools save time. Due to the structure of the approach, you must be prepared to re-evaluate your pricing rules regularly. Failure to do so could negatively impact your bottom line. For example, if all of your competitors increase their prices due to increased demand, you may run out of stock quickly while selling at unnecessarily low margins.
There are some additional limitations with the traditional rules-based repricing approach. You may find your products stuck in a race to the bottom. You could be losing profits by consistently selling just above your minimum price. Sure, your order volume increases, but if you’re constantly operating on a razor-thin margin it is difficult to grow your business. You need a solution that will intelligently and automatically price your items based on the competitive landscape.
Algorithmic Repricing
Many experienced sellers prefer to keep a single source of truth for all cost data outside of Seller Central by using third-party Amazon repricing software. Third-party solutions typically provide more robust functionality than Automate Pricing. Including exact cost information in Seller Central could result in even lower margins, as the tool encourages sellers to price match the current lowest price. Another benefit of a third-party tool is the ability to keep all cost information in a single location, which makes it easier to make decisions about what to restock, when to raise prices, and more.
Keeping cost information in a single location makes it easier to make decisions about what to restock and when to raise prices.
Smart sellers who want to maximize profits rely on third-party algorithmic solutions, which are the best in the business. Algorithms work for you to automatically determine the best possible price for your products based on the competition, your chosen minimum/maximum prices, and other data points.
A quality algorithmic FBA repricer will automatically calculate all Amazon fees and allow you to enter all of your costs for each product, giving you a complete view of the financials of your product. Once you’ve entered your product information, the algorithm constantly works to optimally price any product you list on Amazon, without having to store your product information in Seller Central. It keeps your pricing competitive, allowing you to grab a bigger share of the Buy Box.
Competitive repricing is the most challenging aspect of selling on Amazon. It seems there is no rhyme or reason for who gets the Buy Box anymore. Strategies that work in one category will most likely not work in another category. And even individual items within a category may require a different approach. It is imperative as a smart seller to constantly reevaluate your repricing strategy to stay competitive in this market.”
Chris Anderson
Founder
Superhero Sellers
