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The Basics of Amazon Repricing and How Repricers Benefit Your Business

The Basics of Amazon Repricing and How Repricers Benefit Your Business

Amazon shoppers initially compare prices of items listed on the Amazon platform before deciding whether to purchase the item or not. If an item is priced too high, shoppers usually skip that item in favor of another.

Shoppers skipping an item due to price is a common experience for Amazon sellers. However, despite this shopping behavior, sellers have the opportunity to optimize their listing price and offer a competitive product price through Amazon repricing.


What Is Amazon Repricing?

If you are new to Amazon and are not familiar with repricing, chances are you have been unconsciously employing this method yourself. In brief, repricing is the process of changing the product prices of listed items on Amazon.

You are technically performing repricing if you constantly change the listing price to appease the market and its shoppers. It is estimated that more than two million price changes occur each day on Amazon. Majority of consumers do not notice these price changes when they are shopping online. However, these price changes, minor as they may seem, can lead to a sales slump or increase on the part of the sellers.

Through repricing methods and with the help of repricing software, sellers can offer competitive product prices which results in increased profitability. Amazon repricing is therefore an essential component of any sellers’ Amazon business campaign.


Different Amazon Repricing Methods

Since price significantly impacts consumers’ shopping behavior, repricing has become a critical maneuver of sellers to improve product visibility and sales. To ensure items are priced competitively, you should learn about these repricing methods.

  • Manual Repricing

Amazon sellers use manual repricing to manually change their listing price in response to a competitor’s price change or any significant marketplace update. This is usually done via Amazon Seller Central or via a third-party solution.

Since it is performed manually, constant monitoring of your competitor’s price is required to implement price changes accordingly, which is extremely time consuming. This type of repricing approach is only ideal when you have few items listed on Amazon, and such items are generally considered as non-competitive items. If you have numerous listings, manual repricing will be a laborious undertaking if not ineffective.

  • Rule-based Repricing

This repricing approach relies on the preconfigured rules and strategies readily available within a repricing software. Rule-based repricing works on the assumption that lowering prices wins you more Amazon Buy Box since the software will likely undercut your competitors listing price, depending on the rules and conditions set by the seller. Once a custom setting or rule has been set, necessary price adjustments will then be implemented based on a set of predefined rules.

Some of the custom settings or rules include the following:

    • Match Buy Box
    • Target the Lowest Price
    • Undercut the Buy Box Price
    • Target the Lowest FBA Price

 

  • Beat the Competition by a Certain Amount

Although repricing is performed automatically once predefined rules have been triggered, this does not necessarily result in a beneficial price offer. A rule-based repricing software mainly considers competitors’ prices, forgetting other essential seller metrics and the Buy Box share.

The purely rule-based repricing method aims to outbid competitors by offering the lowest price for more sales without considering the profit margin. This may result in increased sales, but causes aggressive pricing wars at the detriment of the seller’s profits.

Hence, rule-based repricing is ideal for Amazon sellers with more time to analyze market trends and for those with fewer items to monitor. These rules can take a very long time to set-up, especially since sellers must think about the underlying logic, which leaves room for human error. Rules can become conflicting and require constant management and editing.

  • AI Algorithmic Repricing

Experienced Amazon sellers are well-aware of the tough competition within the Amazon marketplace. That is why most of these sellers favor AI algorithmic repricing instead of the aforementioned repricing methods. Although manual repricing gives sellers complete control of the price changes, it demands more time to monitor competitors’ prices and apply the necessary price changes.

While rule-based repricing minimizes the time required for sellers in monitoring competitors, its accuracy and the seller’s profitability are sometimes sacrificed, especially since the predefined rules can often contradict each other. With AI algorithmic repricing, it is physically impossible to set a price that is not aligned with a seller’s pricing goal. It is unlikely because algorithmic repricing relies on carefully developed computer algorithms or AI to set the ideal price, based on all known market conditions and relevant seller metrics.

A reliable algorithmic or AI repricer, like Seller Snap, can predict behavioral changes of competitors based on the collected data directly from Amazon. Its advanced technology can combine AI algorithmic repricing with preconfigured rules and conditions to create customizable Amazon repricing strategies. This results in tailored price adjustments aimed to outsmart competitors without sacrificing the profit margin.


What are the Benefits of Using an Amazon Repricing Software?

The power of an Amazon repricer, especially an AI algorithmic repricer, resonates all over the eCommerce landscape. There are many testimonies of Amazon sellers who improved their sales performance with the use of a repricing software. Here are some of the known benefits of using a repricer:

  • Speed: From the preceding discussions, it can be deduced that an AI repricer is much faster than any human intervention. Since it operates through algorithms, it can easily pick up marketplace changes and apply the necessary pricing strategy to keep your listing price competitive.
  • Logical Approach: Using a repricer assures you that reason will not be overcome by your emotions, such as fear and anxiety. If rules have been set or the AI setting is turned on, your repricer will decide based on relevant and important market factors rather than on impulse.
  • Best Possible Profit: An AI algorithmic repricer will not simply make a price change to cater sales; it will also consider your profit margin before repricing. For instance, Seller Snap considers competitor behavior and automatically applies the best pricing strategy based on a given market situation to avoid an Amazon price war while maximizing profit.
  • Practical Value: With the numerous advantages that AI algorithmic repricers offer to sellers, its practical benefit is sometimes overlooked. The speed, efficiency, and dependability of this repricing software enables sellers to work on other Amazon- related concerns, like remaining compliant and avoiding suspension. AI repricers do not require any set-up on the side from the seller.

 

Repricing and the Amazon Algorithm

The concept of repricing does not exclusively influence price and sales output. Apart from those, repricing also affects the Amazon algorithm. Repricing influences the Amazon search algorithm. The Amazon algorithm analyzes information to determine which products should appear on Amazon search result pages. One of the metrics that the algorithm considers when it comes to ranking is the product price.

Since Amazon is obsessed with providing the best customer experience and would like to be recognized as the top online destination for affordable consumer products, its algorithm favors products priced competitively. With an Amazon repricer adjusting the listing price to a competitive level, there is a higher chance that the Amazon algorithm will notice your listing, leading to its appearance on the search result page.

 

Repricer and the Amazon Buy Box

Once an Amazon seller is Buy Box eligible, the Buy Box algorithm will evaluate the seller against the other sellers to determine how they perform on each variable for the same product. Although Amazon does not share all dynamics of its algorithm, price plays a crucial role when it comes to winning the Buy Box. Price, along with other variables, are evaluated by the algorithm to give consumers the best value for their money.

The Amazon Buy Box should be a significant factor for all sellers since more than 90% of all Amazon sales go through it. A competitive price offer can be achieved through repricing, which in turn helps you increase your Buy Box win rate.

 

Holistic Amazon Campaign

The Amazon algorithm evaluates various criteria to determine whose listing appears in the Amazon Buy Box and Amazon search result pages. Apart from pricing, you should also consider other ranking and Buy Box factors, including but not limited to, proper keyword use, sales conversion, seller’s performance history, delivery time and customer reviews. Following the Amazon guidelines, performing listing optimizations, and a reliable repricing solution can help enhance the overall output of your Amazon business.

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