Jonny Schmitter, Orhan Oguz and Allan Bright
Foundation / Headquarters:
January 2022 / Cologne, De
Online retail arbitrage (resale of retail goods)
Fulfillment by Amazon (FBA)
Rapid Growth With the SellerLogic Repricer in Hand
The three AMZ Smartsell founders set out into the world of E-commerce in January 2022 and their journey has been nothing less than impressive so far. Their company now generates 100k euros/month, a formidable sum, taking into account that their starting capital was a more 900 euros.
An achievement like this requires many things, a solid pricing strategy being one of them. This case study shows how automated price optimization using the SellerLogic Repricer for Amazon increased AMZ Smartsell’s competitiveness and efficiency to thrive sustainably even on a dynamic platform such as Amazon.
AMZ Smartsell’s Business Model
The young company’s business model is built on classic online retail arbitrage. AMZ Smartsell buys retail goods all over Europe at a competitive price and resells these goods at a surplus mainly on Amazon. Leveraging Amazon FBA for fulfillment was a key element of the business strategy from the beginning.
In January 2023, AMZ Smartsell integrated the SellerLogic Repricer into their processes for the first time. Below, we will explore how this integration supports their business strategy and take a closer look at which role it plays in the increase of success in a competitive marketplace.
The Main Challenge – Competition on Amazon
Establishing trust and maintaining highly beneficial business relationships is one of the main challenges in E-Commerce. Working together with the best manufacturers and securing good deals plays a key role if you want to sell successfully on Amazon. The quality of their business contacts enable AMZ Smartsell to gain access to in-demand products and offer attractive prices for them. This in turn increases the chances of successful sales and long-term business growth.
The final price and the general seller performance play important roles in the intense competition for the Buy Box. In order to remain competitive and continuously increase margins, AMZ Smartsell therefore put a strong emphasis on regular price adjustments. This requires constant market monitoring and swift responsiveness to effectively address the neverending changes on a dynamic platform like Amazon.
Solution – The SellerLogic Repricer for Amazon
The AMZ Smartsell founders adjusted the prices manually in the beginning and quickly realized that this was not only time-consuming but that it also didn’t lead to the results they were expecting: Even if they managed to win the Buy Box, it was nearly impossible to maintain it for long, as other sellers swiftly responded to price changes and re-took the Buy Box once again. This process, repeated often enough, leads to price-dumping in many cases.
The solution to this issue was introduced to the founders by recommendation of another seller who brought the SellerLogic Repricer to their attention. The key to consistently selling at optimal prices was the Buy Box strategy of the new tool, which incorporates powerful forecasting and optimization algorithms. Within this AI-based strategy, the process involves:
- Initially securing placement in the Buy Box.
- Gradually increasing the price to retain the Buy Box at the highest possible price.
With this method, the SellerLogic Repricer is not only able to increase the Buy Box share but also achieve higher margins around the clock.
Implementation Using a Practical Example
The following example of a Logitech computer mouse shows the approach of AMZ Smartsell when using the SellerLogic Repricer:
- A minimum price of 42.50 euros and a maximum price of 49.00 euros are set.
- The “Buy Box” strategy is chosen.
- Shipping with Amazon FBA is prioritized as the first option.
Assuming another seller offers the same computer mouse at a price of 45.00 euros in the Buy Box, the SellerLogic Repricer will undercut this price while considering the preset parameters. In this case, the repricer would slightly undercut the competitor’s price by – for example – setting it at 44.98 euros, rather than immediately dropping to the minimum price of 42.50 euros.
Through subsequent gradual price increases, the optimal Buy Box price is ultimately determined, often surpassing even competitor prices. Additionally, the minimum price is never undercut, ensuring that products are not sold at a loss when the minimum price is properly set.
If you are selling with a strong focus on profitability, we recommend setting the minimum price in a way that still allows for a lucrative margin.
Impressive Results Following the Integration of the SellerLogic Repricer for Amazon
The SellerLogic Repricer has been a permanent part of AMZ Smartsell’s business since January 2023. One of the company’s first observations after integrating the tool was an increase in sales for most products. Let’s take another look at the above-mentioned computer mouse: When you compare the sales results from Q4 2022 with the results of Q1 2023, it becomes clear in what way the Repricer is capable of driving business growth for companies.
Before using the Repricer we sold around five units on a good day, now – with SellerLogic’s solution – we’re averaging 25 units a day.
We’re not only selling more, but also to higher prices and better margins, it’s amazing! The optimal Buy Box price can often be higher than the prices the competition is charging.
Beyond the increased sales numbers, the SellerLogic Repricer also made a positive impact on the prices at which the products were sold. For instance, in the case of the computer mouse, the average selling price went up by 45 cents in the first quarter of 2023 compared to the previous quarter.
Lastly, it’s important to highlight that since January 2023, the founders of AMZ Smartsell have experienced a significant increase in available time. They’ve entrusted price optimization to the SellerLogic Repricer, which has effectively eliminated the previously time-intensive manual tasks. Thanks to this tool, the effort invested in price optimization now averages around 1 to 2 working hours per week, a dramatic reduction from the 1 to 2 hours per day required before the repricer’s implementation. This translates to an impressive time savings of 80% to 90%. This newfound time freedom empowers entrepreneurs to focus their energies on other vital business operations and foster strategic alliances, thereby reinforcing their position in the Amazon marketplace.
The Repricer has proven to be an effective solution to save time and resources.
Central Role of SellerLogic’s Repricer: Driving Growth through Increased Buy Box Presence, Enhanced Profitability, and Time Efficiency
By leveraging intelligent price optimization, AMZ Smartsell has successfully bolstered their competitive edge on Amazon, allowing them to demand higher prices for their products. The strategic choice made by the company’s founders to incorporate the SellerLogic Repricer into their operations has yielded remarkable results, elevating their online retail arbitrage venture to another level.
Equipped with SellerLogic’s solution, AMZ Smartsell is looking forward to tackling fresh challenges and extending their already very successful journey on Amazon.
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