Automatic repricing for Amazon FBA sellers

One of the factors you need to get right to succeed on Amazon is your pricing. If you have a great product, a fantastic seller rating, all the right search terms, and the wrong price, you’re going to lose out to a cheaper seller. But of course, you don’t want to race to the bottom and compete with the ultra-cheap guy whose service levels and reviews show exactly why his prices are that low.

So automatic repricing software has its uses. Though you may not need it if you’re selling your first couple of products, if you have a product line of more than ten or fifteen products, and you have a fair number of competitors, it will save you a lot of manual price-checking. Our guess is about 15 products is where it starts really earning its cost back.

Automatic repricing also helps protect you against mistakes. If you’re selling a product for $50 and you enter $5 instead, you have a disaster on your hands – unless you pick it up right away. And it does happen – Amazon posted a Panasonic camera worth $400 for $37.50 a few years back. If you follow the stock market you’ll know all about ‘fat finger syndrome’ and how it can cost banks millions.

Automatic repricing doesn’t just take human error out of the equation, but also human emotion – it works purely on logic. If you see price reductions as a sign that you’ve failed in some way, just use a repricer instead and save yourself the depressing feelings. It will also include shipping (if it needs to) in the price calculations – not including a competitor’s $5 shipping charge could be a bad mistake, but it’s an easy one to make if you’re in a hurry.

Equally, if you run a good rules-based system, it can adjust for sales like Black Friday, and adjust back automatically. If you adjusted manually and then forgot to change the price back, you’d be leaving a lot of money on the table.

And the other reason that repricing software can be useful is that price changes are getting more and more frequent. If your competitors are shifting their pricing every other day, you know to know and be able to respond to what they’re doing.

Even if you have a great product, remember that better pricing gets you better search placement; better placing gets you the buy box. Your product might be better but if you don’t have the right price, potential buyers might not see it.

However, automatic repricing takes away some of your freedom. You’ll need to be nuanced in your use of pricing. For instance, once you’ve got the buy box, you might be able to inch your price up again. Every extra cent on the price is an extra cent of profit. If a major competitor drops out of the listings for whatever reason, again, you might want to experiment with price increases to see if you can take advantage of the less competitive market.

On the other hand you may have a product where your inventory is low, and you have a reorder on the way but you need to ensure you don’t run out before it arrives. Manipulating the price up a little can help slow your sales momentum while keeping your product towards the top of the list.

While high prices help conserve inventory, extra-low pricing can help launch or re-launch a product, particularly when it’s combined with advertising. So again, you might want to fix the price manually there.

You might also want to disregard some sellers when you’re setting your price. For instance, the seller with low review ratings and a poor track record won’t be able to grab the buy box off you – at whatever price. It’s the sellers with good reviews and good track records you need to price against.

And you don’t want potential buyers or existing customers to be put off by seeing your prices change too frequently. It’s particularly annoying for customers to see a review of a good product on a website that says “on Amazon for $29” and then find it’s $32 when they look for it.

So there you have the pros and cons of automatic repricing. You can do without, but it will get more useful as your business grows; and if you do use it, make sure you can switch to manual if you want to.

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