Marketplace repricing, always an integral part of commerce, has come a long way from manually marking wares to the sophisticated software-based repricers of today.
Bagging the Buy Box
Strategic pricing can be the thorniest challenge small to medium-sized Amazon sellers face – set the price too high, and risk a competitor taking the Buy Box or your premium search results away (pay attention, new sellers!); keep prices too low, and you may end up cutting corners and ultimately bleeding your business dry. To nail your pricing approach, it is essential to understand Amazon’s “Buy Box”, which is the mechanism used to determine which merchant will be awarded the sale when a prospective buyer clicks the ‘Add to Cart’ button. Although the Buy Box is controlled by an undisclosed algorithm, sellers can strengthen their ranking by having available stock and ensuring a positive customer experience, though all of this counts for little if your pricing is not right. In the world of Amazon, you ignore pricing at your own peril… and this is where automated repricing comes in!
Check Out the Competition, but Avoid the Race to the Bottom
With low barriers to entry, online marketplaces are constantly inundated by new merchants, eager to earn some positive feedback. But is lowering prices the only way to grab a sale? Not quite! Amazon’s savvy algorithm ensures that sellers can’t benefit by lowering prices at the expense of customer feedback, after-sale support, or shipping quality. Good pricing and good metrics come hand in hand and not a la carte. A repricer combines with other seller metrics to get you the Buy Box ideally not at the lowest price. Play to your strengths to sidestep the slippery slope of lowering prices endlessly. Automatic repricing software not only saves you the trouble of manually keeping track of individual SKUs (Stock Keeping Units) it lets you focus on the crucial stuff – building a relationship with your suppliers and mastering Seller Central and customer support.
The Nuts and Bolts of Online Repricers
The pricing challenge isn’t made any easier by the immense numbers and varieties of online repricers. Do your research before you take the final plunge!
Most software based repricers fall into two broad categories – hourly or instant/continuous. As the names suggests these come down to speed. Instant/continuous repricers make changes instantly and get you the buy box back quicker whereas hourly repricers are an a rotor and have to wait until a pre-set time to check prices and then submit changes if needed. Remember though that although a repricer submits a change to Amazon, everyone still needs to wait for Amazon to action the change, this can take around 5 minutes or even more.
Rules-based repricers allow users to decide how the software should deal with a specific product or merchant. Although they allow greater control and flexibility, they obviously require more work from the seller. Algorithmic/Intelligent repricers, on the other hand, are governed by their own predefined rules to set optimal price. Some repricers, following a hybrid approach, allowing you to choose between algorithmic or rules-based strategies for different items.
Some common additional features include built-in price calculators, built-in pricing rules, instant search, safe mode, pricing history, filtering, analytics, FBA compatibility; as well as the essential options of setting ceiling and floor prices to ensure you never sell too cheaply or price yourself out the market.
Baby Steps Towards Choosing the Right Repricer
A repricer is only as effective as the data you feed into it. Avoid costly mistakes by doing your homework.
What are your costs? Include shipping, packaging, warehousing, sponsored ads and other overhead or indirect costs to set an accurate floor price for your product. Have you paid yourself for your time and energy? Then, get a taste of repricing software by using it only on a small sample of your products.
Remember, the ultimate goal of selling on Amazon is not turnover, but turn a profit!
The article has been written by Jamie, a content writer for Seller Republic. Using an advanced continuous/instant repricing method, Seller Republic is focused on usability ensuring accounts can be set up in minutes. All significant features are included such as in built price calculators, in built pricing rules, instant search, safe mode, pricing history, filtering, analytics, FBA compatibility and min and max price security.