Pricing is an important factor in the Amazon business. A complete understanding of this factor can help you earn buy box and the greater number of sales if used smartly. Understanding the pricing factor is not straightforward, it is the most competitive factor on amazon because the majority of people compare prices before buying any product.
So, if your pricing strategy is wrong, you are losing a large number of buyers and orders. Let’s take a look at the challenges of pricing products on amazon to beat your competitors.
How to price items on Amazon?
It is not a simple task to competitively price your items. Different marketplaces raise the prices of the product if they are in demand and the prices go down if the product demand is decreased.
In the case of Amazon, the algorithm is not as simple as for other marketplaces. Minimizing your margins or reducing and increasing prices according to competitors does not guarantee an improved position on amazon. That is why this is of utmost importance to master different pricing strategies.
As an Amazon seller, you must be familiar with the item price and total price. These are two types of prices.
Item price is referred to as the price of the single profitable products on amazon and this is the price that buyers see on your product listing.
The total price is referred to as the price that includes,
- Handling and shipping charges
- Shipping methods
- Discounts and sales or promotions
- Low-price guarantees
- Business practices
After reading this section, you must understand that by reducing the simple product price only, you cannot improve your ranks or increase sales. As stated above, reducing amazon prices to improve your position in the marketplace is not an easy task.
Before reducing product price, you need to bring change in all the factors mentioned above. A little change to your product’s pricing can bring positive change in the ranks of your product listing.
If you are a newcomer on the amazon marketplace and you do not know about the repricing strategies then you can also use amazon repricing tools. These tools have their price and cons but as a newcomer to this marketplace, you can always go with the repricing tools. You can set a minimum price range to avoid the system going below this price.
Rule-based repricing tools can be beneficial but it is difficult to use for new users. On the other hand, algorithmic repricing tool may offer different advanced features but it is expensive.
Amazon Pricing Tactics:
Pricing tactics are short-term efforts to manipulate a product’s price to reach a particular business goal. Pricing tactics are not different from this definition of Business dictionary.
Sellers on amazon use different strategies to gain a top position in amazon search results and get an increase in their product sale frequencies. Some of the sellers try to minimize the price by offering discounts to encourage users to buy the product.
In short, getting increased sales and the top position in amazon search results is not difficult. The success on amazon is directly proportional to your smart strategies and efforts.