How to Increase Prices on Amazon | Goat Consulting
Implications for Raising Prices on Amazon
As you consider raising your product prices on Amazon, the main issue you could run into is losing the Buy Box. When raising your price on Amazon you must know that your product’s price must be as low as it is on your own website and any other marketplaces. If you have many distributors, you also must consider what price they are selling the product at, and match that or communicate with them for a standard price raise. Amazon’s Marketplace Fair Pricing Policy states that they strive to provide, “the largest selection at the lowest price”. When selling on Amazon you must price as low on the platform as you are priced elsewhere. If you raise your price on Amazon and a lower price elsewhere is detected, you will lose the Buy Box, making it difficult for customers to purchase your product. You will also risk a decrease in sales on the platform. Lower sales traffic can have further implications for your seller central account and can lead to excess inventory issues and a poor sell-through rate. It is important to consider this along with your competitors and the average market price for similar products when increasing your prices. An increased price may initially hurt your conversion rate, if the value is not being communicated to customers, with a higher price they will be less inclined to buy.
How to Raise Prices on Amazon
To update the price of your product on Amazon Seller Central, go to Manage Inventory. Then, locate the product you wish to increase. You can quickly and simply edit the price by typing your new price into the box in the ‘Price + Shipping” column and then selecting “Save” on the far right of the row. Another way to update the price is by selecting “Edit” on the far right of the product’s row on the Manage Inventory page. After selecting “Edit”, you can go to the “Offer” tab to view and edit your products’ pricing. Here you can input your standard price, which is the list price of your product. Below that you are also able to input a sale price, which may be helpful to utilize when first raising a price, discussed further below. Input your new pricing and select “Save and Finish” below to update.
When you go to increase your product’s price on Amazon, be aware that Amazon might have historical data on pricing that they are still referencing. An example of this is if you increase your products by $10 on your website and aim to increase it on Amazon the same day, you may face a Brand Health Error, which is a pricing error, and may lose the Buy Box. That is because Amazon may not be aware of the updated higher price in the marketplace, and is still referencing the low price previously on your website. For this reason, we recommend increasing your website price first if possible, such as a week before, so that there is more time for a new comparison to be set. Once your higher price is set, we recommend changing the list price of your product on Amazon to that. If you still receive a pricing error or lose the buy box, then a technique we recommend is to set a sales price for the time being and gradually increase that sales price by a few dollars a week until it matches the price on your website and you reach your updated listed price without Buy Box issues. The gradual increase of a few dollars a week may help prevent you from losing the buy box and sales, and it also helps customers ease into the increase if they were expecting your previous price.
As you consider the customer perspective, it may also be helpful to utilize coupons when first implementing a price increase. If your price increase comes after a long period of a lower price, some customers may be unhappy if they had expected a lower price. Use a coupon to partially discount off the updated price, perhaps for a month, so customers can become more comfortable with the new price.
