If you are a new seller on Amazon, repricing is something that you need to learn and master in order to survive amidst all those sellers.
Consider a physical store where the price of a product goes up or down depending on a few factors like change in the production cost, or a change in demand and supply equation.
The pricing in an eCommerce platform like Amazon however, is a lot more complicated as you have to deal with dozens of other sellers swimming in the same stream.
What is Repricing?
Amazon is the most volatile market place with a few million third-party sellers. With competition, this high, price is the game-changer in most cases. So the prices here are constantly changing on the basis of competition and race for the Buy Box.
Amazon wants the buyers to get a competitive price, and you get the maximum buyers with your cheap rate. Statistics say that over 2 million instances of Amazon repricing happen each day across the globe.
How does Repricing work?
Once your competitor changes his price, Amazon will notify your repricer tool (you will need a tool like Appeagle or Repricer Express or Sellery).
The tool will calculate the new price considering the minimum and maximum price restraints. Amazon will receive notification about your new price and update accordingly.
Why do you need a repricer?
After you optimize your listing, you can no longer stay away from joining the price war. Regularly adjusting the price will ensure that you maintain a competitive price and maintain your sales.
All the price calculations mentioned above will be done in a matter of minutes! Think of doing all that math yourself and you could see precious hours being wasted when the tool can do it faster and better.
If you have picked the repricing tool you would be using, let’s move on to see how we use it.
1. Set the boundaries
It is important for your repricer tool to know the minimum and maximum price you are willing your product to sell in. Setting your price too high will simply chuck you out of the competition whereas a very low price tag will not justify your profit and also give the competition an unhealthy turn.
Other sellers who can afford a lower margin can also lower the price further, thus putting you in a fix where you can’t reprice it lower. Your buyers will always expect you to be this cheap, and a little hike in price can drive him away.
2. Join the competition
Don’t be afraid to reprice when your peers do so. You know your limits and stay away from dropping the price beyond that point. But don’t hesitate to join in a healthy competition because Amazon repricing is not an option, but a must to survive.
If you are selling something perishable or seasonal, or want to get rid of old stock, you can always slash your prices. But otherwise ignore the prices of the cheapest seller, because what is feasible for him might not be feasible for you.
You can always ask the Amazon repricer to exclude particular competitors from its calculation if you know that they don’t play fair.
3. Consider the Data
The Amazon repricing would depend on a lot of factors. Choose a repricing tool that has good analytical skills and let it study the details of the market, your stock, and your competitors.
The data it gathers should be the deciding factor when you set your new prices
4. Go after the Buy Box
This little space on the Amazon interface holds more power than you can imagine. When a buyer visits a product page, the right side of his screen displays other seller options for the same product.
But only one of them makes it to the Buy Box while the others are listed below in a less visible spot. Unless a buyer wants to consciously compare prices, he will click the one in the Buy Box instantly.
Using a good Amazon repricing strategy helps in getting into the Buy Box.
Most sellers try to enter the Buy Box by cutting their prices. But there are other ways you can do it without putting your profit margin at stake.
The most obvious way to make yourself eligible for the box is to subscribe to the FBA or Fulfillment by Amazon service. The others would have to wait a few months and earn credibility as a seller.
In those few months, create a good seller history. Amazon takes into consideration the customer service factors like
o Speed of delivery
o Prompt response
o Condition and quality of product
o Number of canceled orders
o Number of exchanges
o Seller rating
Having a large variety often helps with the Buy Box. When you have many things to sell, it feeds Amazon’s and customers’ trust in you as a seller.
But it is equally important to ensure that they are available too. ‘Out of Stock’ can reflect badly on your seller image and Amazon expects the sellers to keep their stock updates to avoid adding such unavailable items to the cart.
Price is a crucial benchmark for the Buy Box. The Amazon Repricing tools would automatically set competitive prices based on the rules that you set.
If getting into the Buy Box is set as your goal, then your Amazon repricing tool will do the calculations accordingly.
Can Repricing Harm my Business?
There was a time when customers did not approve of frequent price changes, but that was the time when eCommerce was a new concept, and buyers were accustomed to the ways of the retail stores.
The price change is a universal practice across all eCommerce platforms now and customers expect you to be competitive. It would however be harmful if your prices fluctuate too much.
Don’t take advantage of peak demand times and pull your prices thinking they would buy anyway. It would be better to have a pricing strategy that is more consistent and yet keeps you in the competition.