5 Myths about Amazon repricing software
Seamus looks after Design and Marketing at RepricerExpress. Today Seamus aims to dispel the five most common myths we hear people say about repricing software:
I have written many posts about the value of using repricing software when selling on Amazon, offering proven formulae and tips for winning the Buy Box — yet every time I visit online forums and discussions about selling on Amazon I hear so many misconceptions and myths prevailing about “repricing” and “repricers”.
In its simplest form, Amazon repricing software adjusts your inventory prices based on what is on offer on your Amazon marketplace—and that can be increasing prices as well as decreasing them, but the most often overlooked fact is that it’s all automated according to your own rules.
Amazon repricing software — the truth behind the myths
Myth 1: Repricers can lower prices to as low as £0.01
The Facts: We’ve heard horror stories of sellers seeing prices fall as low as £0.01, but the truth is most repricers will protect you from this — you set your lowest price points that you’re willing to sell at for any item and the repricer will never go below that amount. With repricing tools, you remain in control at all times of your lowest and highest prices.
Myth 2: Repricers create loss makers
The Facts: Very low priced items like penny books exist in a marketplace where sellers are free to sell at any price they see fit, even if those prices seem to be below cost price or break even at best. The truth is, where there is lots of competition and deman, sellers will develop their own business strategies to either shift lots of product on extremely low margins, sell at a loss to increase positive feedback quickly or generally price certain products in relation to a wider business goal. In a free market, you can’t control this, but with Amazon repricing software, you can decide what to compete with, when and how—all on your own terms.
Myth 3: Repricers cost too much for smaller sellers
The Facts: If you spend time every day reviewing and adjusting your inventory’s prices, the cost of a repricer can be more than justified against the time it saves you. As well as increasing your sales 24/7 (even when you’re sleeping), you’ll have much more time to run your business and take care of more important things like sourcing inventory.
Myth 4: Repricers adjust my prices automatically leaving me with no control
The Facts: Automation only occurs according to your setup and rules. Even the most simple-to-use repricing software like RepricerExpress requires you to walk through a set up process to input your costs, set min and max values for your prices and create repricing rules specific to your business. Doing this correctly will unlock more Buy Boxes and increase your sales fast.
Myth 5: It’s too risky to play with your prices when setting up a repricing tool
The Facts: Amazon repricing software will allow you to run price checking without putting your new prices live on Amazon. You can import your listings, set your min/max values and default rules in a matter of minutes—and run repricing over a period of time to see how your setup is performing. Only when you’re happy, do you need to activate price checking on live listings. So you can test and see if price checking is working before going live!
And so, the truth about Amazon repricing software
A repricing tool is just that—a tool, that should create value in your business if used correctly. Repricers can help you increase your sales and maximise your profits if you take the time to set them up correctly. As with all automated software, it’s wise to continually review how its performing and adjust accordingly, but the time you save in using Amazon repricing software will leave you much freer to run your business and master your pricing strategy for continued growth and success.
As a seller utilising Fulfilment By Amazon (FBA) I am very aware of the importance of winning the Blue Buy Box, however there are occasions when I choose not to compete for the Blue Buy Box.
If I see that a competitor has seriously under valued a product, then that product will probably sell quickly and if I just wait a while my product will naturally assume top position. If your competition only has a few of product X why fight them when they will run out anyway.
If I learn that a product is being discontinued by a manufacturer I will just wait until my competitors run out of stock. This has happened numerous times before, so I know it works.
Now the real danger of repricing and I have tested this so again I know it works is that if a competitor knows that your repricing margin is always going to be 50 pence lower than anybody else they can drop their own price again and again until they take you to your lowest price and simply let you sell out of stock and then reprice at a value of their choosing.
I can’t speak on behalf of RepricerExpress but that sort of thing can be overcome if you are willing to put in the effort. With my own software (not an Amazon repricer) you could for instance filter out everything below a certain price or completely ignore everything below your floor price. You could also filter out sellers who have less than a certain amount of stock remaining or filter out problematic sellers altogether. Or you could design your own algorithm that treats specific sellers differently than other sellers (e.g. match one seller(s) while undercutting the rest).
If it’s that complicated it going to be quicker to do a visual check and manual adjustment. New sellers come along all the time and you cant keep altering algorithm every time a new one pops up.
We reprice 2pence above the cheapest price as most sellers undercut the cheapest price by 1p, it means by doing this we remain competitive but actually drive the price up as well.
i.e. seller A is cheapest at £1.00
We’re priced at £1.02
Seller A reprices to £1.01, to be 1p cheaper than me,
Because seller A is now £1.01, mine reprices to £1.03.
Seller A then reprices to £1.02 etc etc
If only every seller had the sense to reprice slightly above the min price rather than repricing to be 1p under, it would keep profit margins at higher levels for everyone.
This is great! I wrote about just the exact same thing a few months back!
I’m glad we’re on the same page Colin. I help out on a lot of forums and I see a lot of misconceptions about repricing software, which is why I wanted to show how it’s a normal part of selling in a competitive environment. The main point, as Glenn touches on, is that you have to devise your own strategy that fits your business—it’s too simplistic (and inaccurate) to aim to beat all competitors and it’s not necessary.
With the introduction of Amazon’s Subscription API we’re going to see finer control of our repricing strategies which will allow us to be much more selective in who we compete against etc. The goalposts are everchanging, but that’s just part of selling—whether it’s online or offline.
One thing that always surprises me with Amazon Marketplace pricing is that (for items with lots of competing sellers) there is almost always a seller with a ridiculously high price charging far more than the cheapest seller (and the direct from Amazon price).
Why do they list a product at a price that no (sane) buyer will accept.