The 14 Biggest Mistakes in Repricing
In this article, we will cover the most prominent repricing bottlenecks in order to evolve sales, grow your businesses, engage new customers, and win the desirable Buy Box.
#1 Using the Wrong Repricing Methods for Your Business Model
There are two popular ways to reprice on Amazon: either manually by adjusting your prices or automatically by using software. When you reprice manually, it gives you a lot of control over your Amazon products but, at the same time, will be more time-demanding or a seemingly endless task. Due to the likelihood of human error, using repricing software to automate manual processes is the preferable option and helps avoid mistakes on a regular basis. However, issues with software are inevitable as well. A lot of Amazon repricers are overcomplicated with superfluous calculation rules and algorithms that usually limit their functionality.
Whether you are repricing manually or using a third-party tool, considering different repricing methods is always a good idea since it allows you to select the optimal repricing tools that will match best with your sales strategy. Even though the competition on Amazon can be fierce and it’s hard to keep up with the online giant’s endless market changes, we encourage using artificial intelligence software as it accelerates repricing remarkably.
Your repricing software may be smart but nothing can be as effective as evaluating previous methods of performance. By analyzing your activity, you understand which one of your products are currently trending and can use this knowledge to set your software work at maximal efficiency.
The selection of your repricing methods should encompass your sales strategy, market twists and turns, types of products, etc.
#2 Neglecting the Role of the Price in Order to Win the Buy Box
Chances to win the Buy Box are primarily shaped by the price. Despite Amazon not revealing the exact algorithm, many sellers and experts have affirmed the importance of the price in practice. That is why accurately setting your price rates with repricing has become one of the most popular strategies. When it comes to placing your products in the Buy Box, the final price has proven to be of highest priority.
If the product or delivery costs start to differ, these changes will also influence the final price, meaning that adjustments should be undertaken promptly at this point. By doing so, online retailers protect their profit margins and are, at the same time able to maintain their position within the Amazon Buy Box. In order to be competitive, you may find it – once again – quite effective to involve repricing software. Along with the price as a crucial factor, other metrics like fulfillment method, stock availability, shipping time, etc. – you can read all about them in our workbook! – play a significant role when it comes to winning the Buy Box position.
There are a few scenarios, where your competitor’s late shipment or negative customer feedback will ensure that you win the golden “Add-to-Cart” field. The SellerLogic Repricer enables you to include these scenarios in your Buy Box and cross-product strategies. Our solution allows you to compare your prices and those of your competitors on the same and similar products, ensuring that your prices stay optimized for winning the Buy Box.
#3 Collisions of Minimum & Maximum Prices Between Amazon and Repricer Software
Often, when using repricing software, you set minimum & maximum prices for all products. However, when you start repricing, remember that Amazon applies minimum & maximum price validation for every ASIN. When using both repricing software and Amazon’s Automate Pricing at the same time, discrepancies between the minimum & maximum prices are inevitable. The issues occur when the prices aren’t aligned and as a consequence, Amazon may deactivate your products when the price exceeds the limits.
An advanced repricing tool can help you determine minimum and maximum prices based on Amazon’s recommendations.
Another factor to keep in mind is that Amazon’s minimum and maximum rates do not contain delivery charges, while repricing tools normally do.
#4 Ignoring Prices on Similar Products
Also, it is very important to keep pace and periodically check competitors’ prices. BuyBox and Product-cross strategies in Repricer automatically do that for the same and similar products.
#5 Changing Prices Manually: Human Touch Versus Algorithmic Accuracy
Eight out of ten sellers regulate prices manually. However, no one and nothing can reach the speed and ridiculous accuracy of an algorithm. Based on the dynamics of your prices, our Repricer suggests following appropriate strategies:
- Fixed prices
Profit or Simple strategies have fixed prices that usually do not change automatically.
- Dynamic prices
Buy Box, Push, and Daily push strategies adaptively change prices between min & max thresholds.
- Mixed prices
Position, Same price, and Manual strategies propose something in the middle between constant and dynamic prices.
#6 Using the Same Strategy for Every Product
Whether it’s Buy Box placement, sales numbers, or consistent margins, each product requires its own sales strategy. Repricing requires segmenting goods based on related factors such as high or low demand or seasonal sales. Should high-demand items be priced differently than those that online retailers are having difficulty selling? Anticipating your answer, let’s consider different Repricer strategies for the most popular cases:
- Simple – assigning a fixed price.
- Position – sticking to a certain position in the rank.
- Same price – keeping the same price as a competitor.
- Manual – applying a wide range of customizable settings.
- Push – setting sale-based rules.
- Daily push – setting daily-changing rules based on sales.
- Profit – calculating the price based on the desired profit.
- BuyBox – competing for Buy Box based on competitors’ prices for the same products.
- Cross-product – competing for Buy Box based on competitors’ prices for similar products.
Experimenting with different strategies helps to find the perfect match. Note that whilst the software can follow your instructions, it lacks the ability to intuitively sense business dynamics or make predictions — something you can do yourself. Examine your stock’s past success, paying attention to how and why it sells when it does (for example, the sale of clothing is increasing on Black Friday). Use what you can learn from former data to profit as much as possible from your repricer.
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#7 Following Someone Else’s Rules
Who knows the warehouse better than you? And, in comparison to your own products, how well do you know others’? Putting this concept into practice, repricing your stock to compete with others is a huge mistake because you may not always have the entire picture. Some retailers have large inventories and can afford to list all items, even the ones with the lowest prices, or they may do so to rapidly improve their ratings.
Keep all activities consistent. The best thing about automating repricing is that you get to make your own rules and play the game. Of course, you can start by experimenting to guess Amazon Buy Box formula and then modifying it to suit your specific needs or observe what your competitors do. But remember that trying to understand the whole picture and develop the unique repricing strategy for every region gives you more benefits and opportunities than copying competitors’ steps.
#8 Setting Your Min & Max Range Improperly
Yet another popular repricing mistake is not setting min & max prices suitably and realistically:
- If you set your min and max prices too close together, you’ll have no space to reprice because the pricing range becomes too narrow, so your prices have tiny chances to be optimized.
- If you extend the gap between min and max prices, you have chances to sell too low or overpriced.
Thus, setting prices that are cost-effective has a big impact on competition and profitability. If you are applying repricing software, agile pricing to your products may extremely leverage your customer’s engagement. Further, it automatically boosts prices or decreases them based on the product’s availability and the demand rate.
#9 Setting Too Aggressive Rules
When you first start using repricing software like our Repricer, it’s tempting to use all features at once, but we don’t recommend it because it may result in a really aggressive rule that may be very fine-tuned, but won’t help increase your sales.
It’s always best to start gradually.
#10 Putting All Repricers in the Same Box
Remember that repricers vary. Choosing the right repricer on the basis of your business need is of paramount importance. This becomes especially rewarding if your repricer supports different strategies from rule optimization to dynamic price adjustment. The agile optimization brings you more sales. Fixed, dynamic or mixed prices can be retained based on your needs.
On Amazon, dynamic pricing prevails: automated algorithms are shaped by pricing strategy taking into account competition, supply & demand, along with other external factors.
#11 Ignoring FBA Options – Shipping Matters
Applying Fulfillment by Amazon (FBA) gives you some advantages – access to Prime customers, which are engaged to buy, Buy Box placement prioritization, and afterward, more sales despite lower fixed costs.
Finally, an FBA retailer can offer their products at a higher price than a seller who does the shipping themselves.It works like this: an FBA seller offers a product for € 30 with free delivery and is awarded the Buy Box. For contrast, independent shipping charges 24 € plus 6 € for shipping and does not appear in the Buy Box.
#12 Undersizing Inventory to Avoid Using Software
Why waste your valuable time manually repricing your inventory when the right tools can bring you impressive results in the blink of an eye? Yes, it will take some trial and error to find the software that best fits your needs, but once you do, you will be able to make it work for you. Your work will be completed as you sleep, allowing you to concentrate on the important things.
#13 Running Out of Stock
Going out of stock isn’t technically a repricing error, but it’s still a problem for Amazon sellers. If you don’t have any inventory to sell, you won’t be able to win the Buy Box, and you won’t be able to make any sales.
Repricing is no longer useful in this case. Furthermore, running out of stock has a negative effect on Amazon BSR rating, and recovering takes time.
You need to ensure the availability of products in stock. Also, preventing running out of stock may be done by using repricing software with dynamic pricing.
#14 Not Calculating Overall Costs
Traditionally, Amazon repricing has become a so-called “race to the bottom,” in which sellers lower their rates to stay ahead of the competition. Naturally, if you don’t keep a close eye on your spending, this technique won’t work.
To prevent a scenario like this, just think about the total costs. Direct costs such as product prices and delivery, along with indirect costs like employee wages, may significantly influence your profits.
Your Amazon sales costs widely rely on your fulfillment method and product categories. Suggest in your calculations other options outside Amazon, for example, advisors that you may need to successfully start your business.
Going through 14 mistakes to avoid, we can surely conclude that smart repricing tools need savvy strategies, and wish you to keep the golden balance, experiment with different strategies, monitor prices, automate all that’s possible to automate, and don’t automate what you don’t understand. And may the Buy Box be with you.
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