-
Amazon Pricing
By ZonSupport | Posted on September 13, 2018| BlogBefore you start working on your Amazon pricing, you need to get into their mindset.
“There are two kinds of companies. Those that work to raise prices and those that work to lower them – Jeff Bezos, Founder & CEO of Amazon.â€
Best quality at the lowest price is what they promise.
You are a guest on their platform so you need to understand what drives them so they can drive you.Â
New entrants struggle with many aspects of Amazon as their dreams and aspirations are top of mind. As a result, many of their decisions are centered around emotion as opposed to hard facts.
Step 1: Know your Numbers!
Know your break-even price, right down to the last dollar! Supplier + Shipping + Duty + Storage + Amazon Commission + Amazon FBA Fees + Amazon Return Fees + Overheads eg cost of money if you’re smacking your credit card to carry you through. These are the main ones to consider but just reflect a moment and decide which are relevant to you and what else you need to account for and then run up the total.
Know your maximum price. Again, focus on hard data. Enter your top 5 keywords and look at similar products to yours on Page 1 and average their price. That’s essentially the maximum price of your product will bare. The higher your price, the further down the pages you will be with a lower volume of sales.
Maybe Page 1 is not a realistic goal for you for many reasons – your cost of inventory is a big one! Make a conscious decision of which page you are shooting for and calculate your maximum accordingly.
Step 2: Price stability
What’s the worst customer experience you’ve ever had?  Buying something and then finding the same thing cheaper down the road is a big one for most.
Again, you need to get with the game. You absolutely need to build customer trust and develop a long-term business/brand on Amazon and you can’t do that by tweaking your price every 5 minutes!
Amazon doesn’t like large price movements. We’ve had clients drop their price $5 to stimulate sales as long-term storage fees approached) and sales stopped! Similarly, other’s have bumped their price by a few dollars to match similar/same competitors and sales stopped…
Reduce your price under $1 every other day if you know you need to get your base down OR create a discount if it’s to be temporary. Creep it up if that’s your strategy but either way, go slow!
You want to “own†the Page you are shooting for so chart your own course. Remember, everyone is pulling levers on Amazon at the time so there’s no point shooting from the hip and tweaking your price to match your closest competitor’s movement. They may be overstocked so trying to move inventory or (hopefully) selling through and exiting the niche!
You don’t work in isolation so resist the urge to react!
Make time your friend. Test yourself – before you tweak your price wait 24 hours and then see if it’s still the right decision. You may be surprised at the result…
As always, ask us anything. If we don’t know, we’ll know someone who does!
Back to Blog
RECENT POSTS
- Amazon Product Documents
- The Importance of Brand and Product Creative on Amazon
- Canton Fair Sourcing Trip – October 2024
- How to Lower your Return Rates on Amazon
- Free Amazon Bullet Point Bot!
- Amazon FBA Refund Update Could Cost You Thousands
- DataDive Amazon Keyword Ranking
- Amazon COSMO Impact On Search
- Amazon Flat Files 101
- Simplify Your Inventory Management
Archives
- October 2024
- September 2024
- September 2024
- August 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- April 2023
- April 2023
- March 2023
- February 2023
- December 2022
- November 2022
- October 2022
- September 2022
- June 2022
- May 2022
- April 2022
- March 2022
- January 2022
- November 2021
- October 2021
- September 2021
- August 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- September 2020
- July 2020
- June 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- March 2018
- February 2018
- January 2018
- October 2017
- September 2017
- August 2017