amazon pricing strategy

Amazon Pricing Strategy to Compete with Amazon Dynamic Pricing

Price on Amazon is frequently changing and unless you own your private label or custom-made bundles, you need to maintain your listings’ prices repeatedly in order to stay in the competition. Amazon dynamic pricing helps to win Amazon buy box and to increase sales. Employing the suitable repricing strategies for your objectives is important, however, unearthing the right ones is challenging. When selling on Amazon, you must have a cohesive Amazon pricing strategy for backing the price you decide to charge for your product.

Here are three traditional pricing strategies you can use for your products, later we’ll discuss repricing strategies.

1. Market Penetration Pricing for Amazon Startup

Also known as penetration pricing strategy, this pricing policy is mostly used by startups looking to break into the Amazon market.

  • What it is: Penetration pricing involves charging an amount lower than your competitors to attract customers when you’re new to the Amazon world.
  • Initial Losses: In the very beginning, you can expect to garner some losses as your sales figures will not be big enough to cover the discount you’re offering to your customers. As sales grow, you can choose to stick with these sales if the overall sales figure is covering costs.
  • Raise Prices: Most sellers don’t stick with their initial prices. When they think they’ve developed a good enough relationship with customers and have established a good standing, they usually raise their prices to reflect their current standing in the market.
  • A Warning: In the online world, charging extremely low prices usually leads customers to believe your product is of a low quality. Therefore, lower your prices by just a dollar, or a few cents, so customers don’t see you suspiciously. Before settling on a price, consult AMZ Insight price tracking. It provides Amazon price watch functionality to track prices of competitors that is helpful in adjusting your prices.

2. Price Skimming for Innovation

This Amazon pricing strategy is usually for those sellers who are looking to introduce something new to the amazon marketplace.

  • What it is: Price skimming refers to initially raising prices when you introduce a new invention or a non-existent item to the Amazon marketplace. As more players enter the market, you gradually bring down your price (while still charging more, preferably).
  • What it does: Charging higher prices initially means that you’ll attract early adapters and lowering them eventually makes more price-conscious customers come your way. If your innovation is good enough, you can generate a lot of money by initially charging more.
  • Illusions: By charging an initial higher price, you will create an impression of exclusiveness and high quality. By the time competitors arrive, you’d have built a brand, already.
  • A Warning: Charging too high price may push customers away, even early adapters. If you have to charge a higher price, make sure your marketing for the product matches it.

3. Bundle Pricing

Bundle pricing is perhaps the most relevant for Amazonians. This Amazon pricing strategy not only do increase amazon sales, but a great way to increase visibility for your business.

  • What it is: It’s selling multiple products together at a lower rate than what they would cost if purchased separately.
  • What it does: It attracts customers by making them think they are being offered something for free. You can also get rid of items that are holding inventory space and/or aren’t selling well lately. Bundles work great during holiday seasons and can even increase exposure for your other products.
  • A Warning: if you don’t offer something good to customers (something they can actually use) or include products that don’t really complement each other, you’ll end up generating a lot of bad PR.


Repricing Tips to Compete Amazon Dynamic Pricing

Tough competition drives sellers to reprice their items frequently in order to compete with Amazon dynamic pricing. It is not easy to continuously change the prices of your items especially when you have several products listed. In such a case, Amazon repricer tools are the best options to keep watch on competitors and match their prices. But you can’t just rely on an automated repricing software, you also need price tracker to track the prices of several competitors in order to learn about their pricing trends and history.

Take a look below on the repricing tips:

Controlling Price

  • Monitor Manually – Check each listing separately and modify prices as required. Doing it yourself gives you the unparalleled control, but also consume heaps of time. If you’re dealing with limited number of listings, the manual handling is a good option, but in-case of large quantity it would become unworkable to do it this way.
  • Incorporate Automation – Just like Adwords, this basically refers to using any repricing software to automatically adjust your prices. This salvages a lot of your time and energy and even helps maintain competitiveness of your listings. However, like all other things this method isn’t safe from risks as well. Keep in mind, an effective Amazon repricer not only reduce prices but also raises it, if needed.

Selecting a Repricing Strategy

Whatever pricing management mechanism you pick, it’s still unavoidable to determine the price of your product. The interpretation of this will differ from seller to seller contingent upon number of aspects. Scroll down to unveil some of them.

Add Delivery in your Price Estimation

Amazon classifies listings on the basis of price+delivery. For Fulfillment by Amazon program, there are no delivery charges. While pricing your products compared to other sellers, make sure you’re setting it on the total cost.

Avail your FBA Benefit

If you trade through FBA, customers will usually pay extra to have a free of cost shipping advantage. Make sure to fix your rates on the basis of your FBA competition. You can even try asking for 10% more than your Merchant Fulfilled competition if you’re the only FBA seller on the listing.

Select Pricing With The Help of Amazon Price Tracker

While using an amazon price tracker for tracking prices, you can easily decide about the product price. Calculate the incurred cost of your products with fee depending on which you can fix your least possible rates.

Free Amazon tool trial

Price Isn’t Something That Makes All the Difference

Keep in mind that by just reducing your rates doesn’t necessarily increase your chances of making more sales. Especially, if your product is in a low-demand niche, reducing the price will not increase your possibilities of making quick sales. One of the ways to deal with this problem is to hold your price and wait till the right customer comes up. In addition, try to include relevant keywords to the listing to optimize and improve your product visibility.

Don’t Set Your Strategy in Stone

Make sure to opt for a flexible Amazon price strategy according to the best sellers on Amazon and don’t forget every unique product demands unique treatment. In case you aren’t satisfied with the present results, don’t be afraid to try something more effective and new.

Use Amazon Repricer Software

To effectively reprice your listings and match prices with the competitors, try to implement Amazon repricer tool. It will help you to automate the price changes as per your set minimum and maximum limits.

Lastly, never panic, plan well and make sure to always be resolute in your pricing strategy with the help of a price tracker. Tracker will help you to know the Amazon price trends and maintain the Amazon price history. Further this information will improve your overall repricing strategy.

Pricing your product is an important step in your Amazon journey. Don’t make assumptions and sign up AMZ Insight to enhance your Amazon price watch capabilities.

Scroll to Top