Evaluating the performance of a repricing software is not an easy task. There are many factors that affect the bottom line – revenue, sold items and profit.
When looking at some of the more common metrics such as Amazon Buy Box share, average price, and revenue, it is important to understand what these numbers tell you about the effectiveness of your repricing software.
Why your average listed price is not that important?
Let’s say you are offering an item where there is one other seller on Amazon, and that seller is offering the item at $11.
You used to sell the item for $11, not using a repricing software and sharing the Buy Box with your Amazon competitor.
Now you started using a repricing software that is lowering the price to $10 and winning the Buy Box. It then increases the price to $15, losing the Buy Box to the other seller.
Your average price is $12.50 and you may be getting 50% Buy Box share, however, the average price of $12.50 is meaningless because you are never winning the Buy Box at that price. You are now getting 50% Buy Box share at $10 instead of $11.
The more important metric to look out for is your average buy box winning price. This is a weighted average of your listed price while you were in the Buy Box.
If you are getting the same Buy Box share as before, but at a higher average winning price, you stand a higher chance of increasing your profit (assuming the price change is not large enough to affect the demand for the item).