Guest blog by Chris Dunne from RepricerExpress
Getting your pricing strategy right is one of the most important parts of selling on Amazon where prices are changing constantly. There are two ways you can manage your prices on Amazon — manually or automatically using a repricer.
The latter is suitable if you’re a casual seller with a small number of SKUs or don’t mind dedicating hours of your week checking your competition and manually updating your prices. However, if you’re a serious seller, moving to an automated repricing software to keep your prices competitive is a smart move.
Let’s look at some of the reasons why.
#1. To save time
The number one reason that people switch from manual to automatic repricing is time. Automated repricing frees up time from your busy schedule—sometimes hours, if you have a lot of SKUs. You’ll have more time to spend improving other areas of your business or simply relaxing with friends and family.
#2. To increase profitability
The number one reason why people don’t use repricing is they (wrongly) believe it is a race to the bottom. It’s not. A good repricing solution will actually encourage sellers to increase their prices when the circumstances are right.
For example, when your competitor(s) sells out. Or, when your metrics are superior to other sellers and you can squeeze a bit more profit out whilst retaining your share of the Buy Box.
#3. To understand your costs better
Before you start using repricing software, you should understand all your costs. As, when you get set up, you’ll be required to enter a minimum price for your listings. Consider ALL your costs and note the minimum price (including shipping) you’re prepared to sell your product at to ensure you are making a profit.
It’s also important to set max prices for all your listings. Your max price should be realistic and will kick in when certain scenarios arise. If you have a ridiculously high price, you run the risk of being penalized by Amazon for pricing a product above the manufacturer’s suggested retail price (MSRP). Amazon will delist products that have max prices outside what it considers a reasonable price.
#4. To decide who you want to compete with
There are many factors you can compete with other sellers on, including fulfillment, seller rating, Buy Box Eligible status and more. A good repricer will have competition settings which let you decide who you want to compete with and how.
For example, you’ll easily be able to avoid competing with sellers who want to engage in a price war/race to the bottom. And, if you’re an FBA seller you may want to exclude certain categories of sellers, such as those with poor metrics and using Merchant Fulfilled Network (MFN).
#5. To win the Buy Box more often
With close to 90% of all sales on Amazon going through the Buy Box, every seller should be aiming to win a share of it. There are many factors that go into Amazon’s Buy Box algorithm, not just price. Established sellers who have shown they can be relied upon will have the best chance of winning a spot in the much covered Buy Box.
How to Increase Your Chances of Winning the Buy Box
The best way to achieve Buy Box eligibility is by delivering an outstanding customer service. Here are our five quick tips for Buy Box success.
- Price Competitively – Price is one of the most important factors Amazon considers when deciding which seller to award the Buy Box to.
- Excel at Shipping – Amazon wants its customers to experience fast and hassle free shipping. If you think you may struggle to achieve this consider signing up for Fulfilment by Amazon (FBA).
- Keep Stock Available – Ensure you stay on top of your inventory managements and keep your most popular products in stock.
- Provide Great Customer Service – Widely regarded as the most customer-centric business in the world, customer service is very important to Amazon. Excelling in customer service metrics including shipping time, feedback rating, customer response time and order defect rate is the key to success on Amazon.
- Protect Your Seller Rating – Sellers hoping to win the Buy Box should aim to maintain a seller rating of over 90% and ideally above 95%. Have a process in place to deal with negative feedback and you may consider outsourcing your feedback management to an automated tool.
Case study: How FBA seller Kev Blackburn uses RepricerExpress to gain a competitive advantage
It’s one thing to market Amazon repricing as a must-have piece of software for Amazon sellers, but it’s another to actually hear from Amazon sellers who are paying to use such software, to truly understand the multiple benefits it brings.
Kev began selling on Amazon in May 2015. Before that, he was working as an Electrical Engineer supporting his family full-time. His work had started to take over his entire life. He became aware of the opportunity to sell on Amazon and make a living and hasn’t looked back since.
As Kev began to sell products on Amazon, he quickly realised that in order to be successful, you need to win the Buy Box. However, the price changes on Amazon are so frequent, it’s impossible to manually update your prices every hour.
After careful consideration, Kev opted to outsource his Amazon pricing using RepricerExpress. He now has over 750 different products with over 4,000 units in stock. Kev estimates he saves 10 hours a week by using RepricerExpress. This is time he can invest in other areas of his business or with the family.
Check out the video below to see how RepricerExpress helped him net £60,000 in sales over the last 30 days.
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.
So, these are just five of the reasons why you should consider automating your prices with Amazon. For sellers like Kev, 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.