Online retail changes at dizzying speeds and it can be difficult to keep up with the rapid pace in which product prices and their positioning change. If a business is a “one-man shop” how are they to compete with bigger sellers? Even if you have a staff overseeing product listing and pricing, it’s nearly impossible to keep up with the constant changes, especially when you are managing hundreds or thousands of skus.
These days, repricing software is a must-have tool in order for sellers to stay competitive. In a nutshell, repricers keep an eye on various factors and automatically re-prices your items accordingly. Different repricers use different methods. Some use preset algorithms while others use rules to identify when a price change happens. Both can be equally as effective.
Successful repricing requires a balanced strategy. One that is competitive and intuitive, improving profitability and sales volume. Our partners at XSellco Price Manager shared 6 vital tips that to help you create a successful repricing strategy:
- Don’t see yourself out of business. 70-80% of sales made in Amazon’s marketplace go through the Buy Box. It’s an important place to be, but don’t sell yourself out of business to get there. Amazon keeps the specifics closely guarded, but we know that many factors help determine who's in the Buy Box, including price, inventory, feedback and returns. Although price plays a significant role, it’s certainly not the only factor. Be sure your price strategy provides a healthy ROI, whilst still being competitive.
- Look at factors that affect margin. Use a method that takes costs and other factors into account, like shipping, tax data, Amazon listing and FBA fees.
- Combine algorithmic pricing with rules-based pricing. Doing this gives you the flexibility to take advantage of multiple strategies. Algorithmic pricing uses pre-defined criteria centered around your data. With rules-based pricing, you customize your own rules that empower you to define exactly how you compete against others in the market.
- Set a max and minimum. It seems like an obvious statement to set your limits, but this is typically associated with just pricing down. If you’re using a strategy that might price up, you’ll need to set a maximum too.
- Don’t undercut your Amazon offerings on your own website. Amazon might very well penalize you or even shut you down.
- Find a Repricing Tool with fixed rates. Repricers that charge a % of revenue penalizes sellers when they have a good month. Fixed rate repricers scale with your company and encourage growth.
ReplyManager customers are eligible for a 50% Price Manager Plus for the first 6 months. Click here for details.