Amazon is today’s top online selling destination. With the tech-giant leading the eCommerce race, more and more entrepreneurs are enticed to participate in its rapidly growing marketplace.
It is estimated that there are more than 1.5 million active sellers on the Amazon marketplace. This year alone, more than 530,000 new sellers joined Amazon. This translates to around 1,580 new sellers joining Amazon every day. Therefore, making Amazon a highly competitive marketplace.
To achieve growth and survival in a highly competitive marketplace, you need to be creative with your approach. Apart from simply strengthening brand awareness, it is best to optimize your listing price to drive shoppers to your business and ultimately improve sales conversion.
Why Pricing Matters
Pricing is crucial in every business because it defines the product’s value. It represents a tangible price point that allows shoppers to evaluate whether your item is worth their money.
It would be advantageous to recognize price as a marketing tool you can easily tweak to favor your business or align with your Amazon campaign.
In fact, Price is the only element among the 4 Ps of marketing that involves revenue rather than expenses. Compared to Product, Place, and Promotion, changing price is almost effortless on the seller’s part.
Since the importance of pricing has been established, your pricing decision should not remain an afterthought if you wish to grow your Amazon business. You should realize the importance of pricing strategies and its impact on shaping the overall profitability of your business.
To help you establish a reliable pricing strategy capable of delivering competitive listing prices, utilize an Amazon repricing software.
What is Repricing Software?
What makes Amazon a convenient platform for sellers is the availability of Amazon seller tools. These seller tools are either provided by Amazon or third-party developers, which helps improve the efficiency and productivity of sellers. One of the highly used Amazon seller tools is a repricing software.
In general, whether on Amazon or other eCommerce platforms, a repricing software is a tool used by sellers to adjust the listing price to obtain a competitive edge in the marketplace.
In the context of Amazon, an Amazon repricer allows sellers to raise or lower their listing prices to outbid competitors, to attract shoppers with a competitive price point, and to help win the Amazon Buy Box.
Which Repricing Software Should You Choose?
Competition in the marketplace prompts price changes. It is estimated that more than 2 million price changes happen every day on Amazon. For that matter, choosing the most appropriate repricing software for your business is critical for improving the performance of your business.
Manual Repricing Software
A manual repricer facilitates manual updating of prices for every product in your inventory. This can be done either through the Amazon Seller Central interface or via a third-party repricing software.
With manual repricing, you can have complete control of your listing price, but it will require a great amount of effort since price adjustments are carried out manually. Hence, manual repricing is ideal for sellers with small amounts of high-value items.
Rule-Based Repricing Software
A rule-based repricing software performs automatic repricing once pre-defined rules have been set up and triggered. Price adjustments are not fully automated, since they require sellers to set up rules and conditions, which can be time-consuming and prone to human error.
Some of the custom settings or predefined rules often found on a rule-based repricer includes the following:
- Match Buy Box
- Undercut the Buy Box Price
- Target the Lowest Price
- Beat the Competition by Certain Percentage
- Beat the Competition by a Certain Amount
A rule-based repricing software works under the assumption that offering the lowest price wins the Amazon Buy Box. Hence, the repricer will undercut competitors based on the selected pricing rules and conditions.
Since this type of repricer is solely focused on under-cutting competitors by offering the lowest price, it can result in aggressive price wars that can be detrimental to your profit. It can harm profit margin because the highest profitability of your listing is sacrificed for the sake of outbidding competitors.
As mentioned above, rule-based repricing softwares require setting up pricing rules that require time for analysis. Sellers should adequately understand the logic behind each rule before implementing them. In some instances, rules can become conflicting, necessitating constant monitoring and editing on the seller’s part.
Therefore, a rule-based repricer is ideal for sellers with few items to monitor and those with the luxury of time managing and editing pricing rules that may sometimes become conflicting.
Automatic AI Repricing Software
An automatic repricing software is ideal for sellers with a voluminous inventory. It is an excellent option for professional Amazon sellers with various products and different product lines. It removes the burden of manually inputting prices and constantly monitoring price changes.
An algorithmic repricing software utilizes sophisticated AI algorithms to determine the best possible price for your listing without sacrificing profit margin while avoiding Amazon price wars in the process.
Unlike a rule-based repricer, an AI repricer can monitor variables important for winning the Amazon Buy Box. It sets the listing price at an optimum level to deliver the highest possible return with the least effort on your part.
Since the repricing process is essentially automated, you can simply switch on the AI setting for the automatic price change and let the software work for you. Moreover, a more advanced AI repricing software like Seller Snap can be combined with customizable price rules to meet specific business goals.
How Does Repricing Software Benefit Your Amazon Business?
From the discussion above, you can simply deduce that an AI repricing software is far superior to rule-based and manual repricers. To emphasize its superiority and why most Amazon sellers are using an algorithmic repricing software, here are some of its known advantages.
1. It Helps Win the Amazon Buy Box
Assigning the lowest price to your product does not automatically guarantee that you will win the Amazon Buy Box. Amazon advises sellers to make sure that products are priced competitively.
An algorithmic Amazon repricer can help you improve your pricing strategy and offer a competitive price for your listing.
This type of repricing software will not simply lower its price to counteract the price slashing of competitors. Instead, it will evaluate several factors, including competitors’ behavior, overall market condition, and other seller metrics. It will then apply the best strategy for each specific situation to win the Buy Box
2. It Helps Attain Higher Profit Margin
As mentioned above, an AI repricer will not simply lower your listing price because competitors lowered their price offer. The sophisticated AI algorithm will outsmart competitors with a strategic price change to win the Amazon Buy Box at the best possible price.
The AI repricer operates to avoid price wars. It will not engage in retaliatory price slashing just to undercut competitors. Therefore, protecting your profit margin in the process.
3. It Promotes Efficiency
Unlike other repricers, there is no need to constantly monitor price change when using an algorithmic Amazon repricer. The AI repricer removes tedious elements, which allows you to focus more on other vital aspects of your business for maximum productivity.
4. It is a Time Saver
If you are currently dealing with numerous items in your inventory or planning to expand your listings, an AI repricer will be useful. By automating the repricing process, you can save time. It helps you avoid the task of manually inputting price adjustments for each item in response to a competitor’s price change.
5. It Helps Avoid Inconsistency
Since the repricing process is essentially automated, you can avoid inconsistencies with your listing prices. With voluminous inventory items, you might get confused and commit an error when manually changing prices.
Making a Wise Choice
Utilizing a repricing software for your Amazon business is a wise thing to do. As marketplace competition increases, the repricer can help you be more competitive. This Amazon seller tool will serve as a multiplier that can increase the efficiency and effectiveness of your strategies, particularly your pricing strategy.
Another way you can improve your Amazon campaign is to ask the assistance of an expert eCommerce consultant. Their expertise can help you determine the most appropriate Amazon tools, strategies, and resources to take your business to another level.
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