Your Quick Guide to Amazon Repricing
Amazon repricing is basically the implementation of price changes on products in the Amazon marketplace. It’s similar to how repricing is done in most stores except that there are special considerations to take into account. Sellers on Amazon can’t just change prices based on the changes in the cost of the products they obtain or the raw materials they use to produce their products.
What Makes Repricing on Amazon Different
Amazon, being an online marketplace, makes it easy for shoppers to look for products and information about them (the prices in particular). This means it’s easy to do comparisons. Buyers obviously tend to buy products that are cheaper especially when the sellers have similar ratings. Because of this sellers need to adjust their prices accordingly. Some sellers may use Amazon repricer software to set ideal competitive prices for their products.
Repricing on Amazon can happen quickly, frequently, and on a large scale. In fact, based on a 2013 study by Profitero, Amazon changed prices over 2.5 million times per day. It’s considerably different as compared to what happens in brick and mortar stores. Walmart and Best Buy, for example, only did around 50,000 price changes for an entire month based on the same Profitero study. There is no need to do physical price tag changes, so sellers can just introduce changes as they deem necessary. For this reason, repricing is something sellers should pay attention to. It’s not just an option but an important part of business that requires strategizing and perhaps the use of repricing software tools.
Repricing Strategies on Amazon
As mentioned, changing prices on Amazon cannot be entirely based on product cost changes or with changes in overhead and marketing expenses. Sellers and experts would recommend the use of strategies. Some of which are as follows:
- Setting Minimums. It’s important to determine how low you can sell to avoid losses. A break-even shouldn’t be your minimum but if you think it can help you attract buyers, you may even go lower than the break-even provided that you see a corresponding increase in buyers.
- Setting Maximums. Determine a maximum price that will get you the best profit but not discourage potential buyers.
- Competition Setting. To avoid repricing that leads to consistent losses, determine the sellers you are willing and able to do a price competition with.
- Using Product Condition as a Factor. Adjust your minimum and maximum prices based on product condition. Make sure your price for a used product is not going to be higher or even close to that of a brand new item offered by a competitor.
It’s important for every Amazon seller to be mindful of their repricing practices. It’s something that can be done manually but it may be necessary to use an automated repricing software tool to be competitive.
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