Since the Amazon marketplace is highly active, Amazon sellers utilize Amazon seller tools to obtain a competitive advantage. One of the widely utilized Amazon tools is an Amazon repricer. If you wish to improve your price management strategy, the use of repricing software is highly recommended.
In this article, we will discuss some of the Amazon repricing strategies and repricing tools you can use to improve your Amazon business.
What Is Repricing?
Before we delve deeper into the best repricing strategies for Amazon sellers, it is best to refresh our understanding of what repricing is.
Repricing is one of the tools online sellers use to keep their price management strategy effective. Whether you are selling on Amazon, Walmart, or other online selling platforms, repricing is inevitable.
According to the Merriam-Webster dictionary, repricing is the “changing of price.” In the context of eCommerce, repricing can be defined as the method or strategy of updating product prices in real-time by means of a repricing software or Amazon repricer.
Repricing strategies are implemented to facilitate the necessary price adjustments to keep listing prices on a competitive level. Thus, allowing sellers to maximize the conversion rate of their online store.
Some of the commonly utilized eCommerce repricing strategies are Manual Repricing, Rule-Based Repricing, and Automated Repricing.
Different Repricing Strategies for Enhanced Price Management
Like any other business, your Amazon business requires careful planning, preparation, and execution of strategies. Optimizing your eCommerce business operations will require a robust price management strategy. To do so, here are some of the best repricing strategies you can incorporate into your business.
Manual repricing is one of the common repricing strategies you can implement for your business, whether you are operating on Amazon or other eCommerce websites. This repricing strategy pertains to manually adjusting the listing price to compete with the price set by other sellers.
Despite the technological advancement and the availability of sophisticated third-party repricing software, some sellers choose to adjust their listing prices manually.
Some Amazon sellers prefer the manual repricing strategy over other repricing strategies because they can maintain full control over price adjustments.
Is Manual Repricing Strategy Best for Your Business?
This repricing method is highly recommended for sellers with less competitive items on their listings.
Manual repricing is ideal for sellers who have few direct competitors and have the time to make frequent manual price adjustments. For instance, manual repricing can benefit from low-volume Amazon sellers, handmade sellers, or sellers with limited product catalogs.
In contrast, high-volume sellers using this repricing method will find it difficult and time-consuming to adjust listing prices constantly. Furthermore, constant manual price adjustments of multiple listings can sometimes result in incorrect listing price entries, which may result in costly pricing errors.
Another popular repricing method is rule-based repricing. True to its name, rule-based repricing operates within predefined rules. It simply means that a rule-based repricer adjusts listing prices based on the rules set by the seller.
Some of the common predefined pricing rules readily available on a rule-based repricer may include but are not limited to the following:
- Match Buy Box Price
- Target the Lowest Price
- Undercut the Buy Box Price
- Target the Lowest FBA Price
- Beat the Competition by a Certain Amount
- Beat the Competition by a Certain Percentage
When a particular rule has been established and the marketplace scenario fits within pricing rule parameters, the rule-based repricer adjusts the listing price. Hence, some online sellers consider rule-based repricing an unpolished form of automated repricing.
Amazon provides sellers with an “Automate Pricing” tool to facilitate rule-based repricing for free. Some of the rules available on the Amazon Automate Pricing tool include:
- Competitive Featured Offer: This repricing rule allows you to set your listing price to be below, match, or above the Buy Box offer.
- Competitive Lowest Price: Choosing this price rule will let you set the listing price to be below, match, or above the lowest price.
- Competitive External Price: This repricing rule means that the price of your SKU can match or be capped at the External Price. External price refers to the item’s lowest price from other retailers, which does not include prices from other Amazon sellers.
- Based on Sales Units: This price rule means that you can decrease your listing price based on the sales volume target you select within a set time period.
If you want to learn more about how Amazon’s version of the rule-based repricing works, you can check the video presentation below:
Is Rule-Based Repricing Strategy Best for Your Business?
The rule-based repricing method, whether used for Amazon or other eCommerce websites, is ideal for sellers who have no time to adjust their individual listing prices manually. The predefined rules readily available on the repricer makes price adjustments more convenient for sellers.
However, Amazon sellers should also take into consideration that this repricing method operates under the assumption that when the price is lowered, sellers can win more Amazon Buy Box. In such a case, the rule-based repricer aims to undercut the competitors’ listing prices based on the set pricing rules.
Moreover, since a purely rule-based repricing method focuses on outpricing competitors, it can be prone to price wars detrimental to your profit margin. Worth noting that price rules can sometimes become conflicting and will likewise require constant management and editing.
Automated repricing, sometimes known to the eCommerce industry as AI or algorithmic repricing, is a more advanced repricing method. Its fully automated repricing process distinguishes this method from manual and rule-based repricing.
This repricing method utilizes AI repricer or algorithmic repricing software to ensure that your listing prices are properly optimized. Unlike other repricing strategies that are prone to human error and biases, the automated repricing method will take into account multiple relevant factors before making any price adjustments.
A typical AI repricer considers marketplace price notifications, competitors’ price change and behavior, crucial seller metrics, and the overall market conditions to set the best possible prices for your listings.
In some cases, an AI repricer can even predict behavioral changes of competitors based on the collected data from Amazon. Furthermore, its advanced technology can combine AI repricing with predefined rules and conditions to help you customize your price management strategy.
Is Automated Repricing Strategy Best for Your Business?
High-volume sellers with highly competitive products can maximize the benefits of automated repricing. With the help of an AI repricer, sellers can avoid emotion-driven price adjustments while saving time and effort in the process.
Using an AI repricer can help you quickly adapt to your competition and minimize the margin of error that can adversely affect your profit margin. You can obtain a competitive pricing advantage with a little effort through automated repricing.
The fee involved is perhaps the only thing that concerns sellers the most about automated repricing. Unlike manual and rule-based repricing, which has free-to-use options from Amazon, utilizing AI repricing strategy comes at a reasonable price.
However, the good thing about these third-party Amazon seller tools is that they allow sellers to use their products for free within a limited period. Thus, allowing sellers to create a well-informed and experienced-based purchasing decision.
Which Repricing Method Should You Choose?
Some Amazon sellers looking for complete control over their product pricing activities will likely choose manual repricing. However, such a strategy will consume the precious time of sellers, especially when monitoring competitors’ prices and applying price changes to their listings.
On the other hand, rule-based repricing will minimize the required time for monitoring and price change application. However, price change accuracy and profitability are sometimes sacrificed, especially when chosen price rule parameters contradict each other.
Going beyond manual and rule-based repricing, you have the option to choose automated or AI repricing for your online business.
The reliable computer algorithm or AI of an automated repricer can automatically set your listing prices based on all known market conditions and relevant seller metrics that help achieve your business goals.
You can expect that with an automated or AI repricing method, you can obtain a tailored price adjustment directed towards surpassing competitors while safeguarding your profit margin.
However, despite all of the facts mentioned concerning repricing strategies, choosing a repricing method for your business largely depends on the size of your business operation, your business goal, your budget, and your desire for growth and expansion.