Every Amazon seller aims to make as many sales as possible. A variety of variables influences a customer’s decision to buy your goods. In short, you need the right Amazon seller pricing strategy.
Starting with where your goods appear in keyword search results, the number of reviews and ratings you have, if your listing has high-quality pictures and informative text, and delivery speed. And, of course, the price of your goods plays a role in the choice to purchase.
Keep on reading for our breakdown of all the latest amazon pricing strategy tips. Also, we’ll explore the elements of the amazon dynamic pricing strategy.
Amazon Seller Pricing Strategy 101
Avoid being the cheapest seller.
It’s a widespread misconception that customers will flock to your website if you price your goods cheap enough. Yes, they will, but not for the reasons you think.
If you do it often enough, consumers will begin to view your goods as low-quality rather than competitively priced, and it will soon devolve into a race to the bottom.
Instead, we recommend that you price your goods 1.5% more than the lowest seller. You won’t be caught up in a race to the bottom this way, and you’ll still be competitively priced.
Follow the Herd… For Now
If you don’t want to use the pricing mentioned above methods, here’s a similar one–but it works a little differently. Instead of almost matching the lowest sellers’ pricing, look at what your FBA rivals are charging.
Matching the lowest FBA competitor’s price can boost sales, but it will lower your profit margin.
This much more aggressive pricing approach may help make a fast sale to boost product ratings or to move stock that has been sitting in Amazon’s warehouses for a while and is about to be charged long-term storage costs.
You may establish a minimum (floor) price for your products using a repricing solution, and you’ll never fall below it. You may also eliminate vendors with low Amazon seller ratings or a habit of undercutting to prevent a price war that affects your revenues.
Choose What You Need to Reprice
Take a step back and consider what sequence you should reprice items in before slapping a virtual “for sale” tag on your whole inventory.
For example, your sitters (those annoying items that seem to prefer being in the FBA warehouse than being in the hands of a customer) should be examined first, so you don’t end up with obsolete stock.
Another approach is to start at the top of your inventory’s cost structure and then shave a few bucks off. Shoppers who have their hearts set on a high-priced item will rejoice when it becomes more affordable.
Amazon Dynamic Pricing: The Basics
You’ve most likely heard about Amazon Dynamic Pricing. A standard pricing technique in which a product’s price changes in response to market circumstances and supply and demand.
This implies that pricing on Amazon may vary every few minutes owing to fierce competition among sellers and fluctuating consumer demand. Price changes are more frequent in a more dynamic market.
Thanks to machine learning, you can now adjust your prices to attract new customers. You can always check out seller snap and the insights it can give you.
Sellers can conduct market research to determine the best price points. Let’s take them one strategy at a time.
Follow the Market: Supply and Demand
It all comes down to what the market wants.
It all boils down to the kind of goods you choose to supply and the market demand. If you underestimate the need, you may have to cut your pricing.
Price Below Strategy
To set yourself apart from the competition–at least for a while–offer your goods at the lowest possible price. Being the cheapest on Amazon will get attention from potential consumers.
But be cautious. If your business has a reputation for being the cheapest, it may impact how your audience perceives the quality of your products.
It may lead to unhealthy competition in the long term, which can be detrimental to your company. On the other hand, setting a low price does not ensure that you get the Buy Box.
This approach may help sellers with trouble with their ratings, but it isn’t a long-term answer.
Price Above Strategy
You are selling your goods for more money than your rivals. Although it may seem strange, it all relies on your brand’s reputation and your position as a vendor.
Make confident you have all of the necessary justifications for selling at a higher price. You’ll attract customers searching for the most outstanding value and who wish to avoid dodgy goods that seem too good to be true.
Playing It Safe
If you’re not in a position to take risks or just getting started with dynamic pricing, the most straightforward approach is to choose a price that is neither too high nor too cheap.
Maintain your position in the game without losing too many margins.
Competitor-Based Pricing Strategy
Examine and match the prices of your competitors. This is an excellent choice to remain competitive if your product is comparable in quality.
However, we suggest that you have a plan that is more robust than just matching pricing. Only do it in such a manner that customers can tell you apart from other vendors.
Dancing With the Amazon Pricing Algorithm
Whether you’re a new Amazon seller or you’ve been in the field for years on end, it’s always a good idea to switch up your Amazon seller pricing strategy every once in a while.
We hope that our guide has shed some light on how a new different low-cost strategy can boost your bottom line profits.
And, if you liked this article, then you’ll love checking out our additional tips and tricks. All of those will be available in our business section.