Guest Blog: Why Amazon Sellers Are Turning to Repricing Software to Stay Competitive
Post by Expandly on 9th August 2018
On the Amazon marketplace, you have two options: price manually or automatically using repricing software such as RepricerExpress. Savvy sellers are switching from manual to automatic repricing to save time, increase sales and win the Buy Box more often.
A repricer will keep your prices competitive at all times, even when you’re asleep. Who wants to spend hours sitting at a computer screen manually repricing? An automatic repricer can reprice continuously so you’ll have more time to spend on improving other areas of your business or simply relaxing with friends and family.
The Fundamentals of an Amazon Repricer
Generally, a repricer will look at the minimum and maximum prices and automatically update your prices based on the parameters you’ve set.
Repricing software protects your profits by being patient and taking the emotions out of pricing. Someone manually repricing may keep cutting their price until they win the Buy Box. They could be losing out on profit by not automating this process and leaving it to software solutions, that will only compete on your terms and when the time is right.
And if a competitor sells out, a smart repricer will automatically increase your price. This could be particularly useful around the holiday season when certain toys and games become must-haves, whatever the price.
Some sellers will set up their pricing rules, their minimum and maximum prices and then forget about it. However, a savvy seller will use the information he receives from his repricer to make better decisions.
By reviewing your pricing on a regular basis, you can ensure everything is behaving as it should and see if there’s any room for improvement. With outside factors, such as competition, constantly changing, what is working now may not work in the future.
5 Ways to Make an Amazon Repricer Work for You
One of the worst things you can do with repricing is to engage in a race to the bottom. Sure, you might get more attention from buyers, but it’ll come at the cost of your bottom line.
Here’s how to avoid that and go about things more efficiently and effectively.
1. Focus on Your Own Strengths
Make a list of five things you’re really good at and centre your repricing rules around them. If you’ve got really high seller metrics and your main competitors don’t, then you don’t necessarily need to focus on price as much to get a piece of the Buy Box. But if your metrics are lower (or you’re just starting out), then you’ll probably need to focus on price more.
2. Calculate Your Minimum and Maximum Values
The price you have to think about is the landed price, which is the price when shipping is factored in. And when calculating your minimum price, these are the things you should pay attention to so you can surpass breaking even:
– Item price (from your supplier)
– Selling fees
– FBA fees (if you use them)
– Postage/courier fees
– Shipping fees
– Category fees
– Built-in profit
– Labour and building costs
– Packaging costs (such as labels, envelopes and boxes)
– Marketplace software costs
3. Decide Who You Want to Compete With
You’ll want to narrow your focus on your competitors, so you don’t compete with everyone in the category. For example, if you sell only new items, you may want to exclude sellers who sell used versions of the same product. They’ll be able to sell it for less because the product isn’t in as good condition as a new one, so there’s no way you’ll need to win on a pricing front.
Or maybe you’ll want to only compete with domestic competitors because that’s who buyers prefer, and because you can improve your odds of winning a Buy Box at a higher price when competing against domestic sellers (instead of a lower price when competing against international sellers).
Spend some time researching your competitors (and make notes on their seller IDs), so you’ll get a strong idea of who to battle, then check the various criteria on your repricer to see who you can include and exclude.
4. Look at Competitors’ Stock Levels
This is one of the criteria you should be looking at when evaluating who your competitors are but also when making price rules in general.
If you find sellers in your category are consistently out of stock, then you can pad your price a little higher for when they run out of an item — you’ll be one of the only one (or maybe the only seller) with that product available.
5. Don’t Act Too Hastily
Lastly, remember to be patient and not to panic when you see prices around you dropping below your minimum price. You set that minimum value for a reason, and it’s important to not get emotionally caught up in fear of losing out on a sale. You’ll just end up in a race to the bottom that way and sharply eat into your profits.
Instead, wait until the chaos has died down and re-evaluate your surroundings. If the race-to-the-bottom sellers have run out of stock, this is your time to jump in and take advantage of the new landscape. Remember, you’re operating by your rules and not those of your competitors so don’t panic and reset your minimum values to capitalise on an easy, but not profitable, sale. Instead, think long-term.
Sellers should use a pricing strategy in line with their overall business strategy. It is important your repricing software allows you to decide who you want to compete with and who you don’t want to compete with.
For many sellers, repricing software has become an essential tool for their Amazon business. If you’re thinking of giving repricing software a go then check out the special offer below.
Sign-up to RepricerExpress today using the promo code “REX10”, and you can enjoy 15 days of Amazon repricing for free (no credit card required), then get a 10% discount on your first month’s subscription.
About the author
Chris Dunne is a Marketing Executive at RepricerExpress who writes about ecommerce mainly. Chris is a huge football fan and craft beer nerd.Tweet