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Mon Sept 10 2012 15:16:25

Cent Wars: By How Much Do You Lower Prices to Compete?

By: Julia Wilkinson

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Sellers on marketplaces struggle to keep their inventory competitively priced, but not so much that they lose money -- perhaps none so much as on Amazon.com. There is an interesting discussion on one seller board about "Cent Wars" -- complaints about sellers who undercut other sellers by a penny. This is also part of larger discussion about a "race to the bottom" mentality on Amazon, but that's a separate issue.

One seller thought that "there is no strategic reason why someone would want to be the lowest price by a single cent or equivalent. Some people think it is because they will get the buy box more often. WRONG. Some people have their repricing software set wrong, IDIOTS."

But another said non-FBA (merchant-fulfilled) sellers will "try to stay at the top of the list by always having the lowest price even if it's by a penny." FBA (Fulfillment By Amazon) sellers are already displayed at the top of the list, so this obviously helps their sell-through rates.

They also pointed out that not all books will sell quicker with this type of strategy, "but it's knowing which books will and which sellers you try to beat by a penny." It's also true that buyers look at a variety of factors when buying and not just price -- for example, a seller's feedback, the item's condition, and the detail (or lack thereof) of the seller's description. (In fact, many times when it comes to books, I notice sellers do not mention the publisher's name and the exact year of publication and edition/printing).

I'm wondering by what increment sellers lower their prices to compete with other, similar items, when they want to lower them (let's not forget that sometimes, such as when you have an item in better condition, you may be raising your prices). Do you lower your prices by a penny, or do you use a bigger increment, such as a nickel, dime, or more? Does it bother you when other sellers undercut you by a penny, or do you just shrug it off as doing business? Do you have a set amount or do it on a case-by-case basis? Post a comment here!




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Cent Wars: By How Much Do You Lower Prices to Compete?   Cent Wars: By How Much Do You Lower Prices to Compete?

by: mylifeisgood This user has validated their user name.

Mon Sep 10 16:38:28 2012

Competition is the American way.  I'm usually the  cheapest in any of the areas I sell in. I might check other sellers every month or so but I really don't pay much attention to them.

I don't have the time to worry about what they are charging. If when I list the item it was the lowest price it wasn't by a penny more like a dollar or two so if they want to mark theirs down by a penny less then me, thats fine. Have at it.

Cent Wars: By How Much Do You Lower Prices to Compete?   Cent Wars: By How Much Do You Lower Prices to Compete?

by: renaissancegirl This user has validated their user name.

Mon Sep 10 17:33:59 2012

I list the item for what I want to sell it for. Many times I sell my items for $10 when there are many up there listed in the same condition and category for $5. Many factors play into which item a buyer chooses.  

Cent Wars: By How Much Do You Lower Prices to Compete?   Cent Wars: By How Much Do You Lower Prices to Compete?

This user has validated their user name. by: iheartjacksparrow

Mon Sep 10 18:23:57 2012

I'm with "renaissancegirl"; I sell my items for the amount that I want to receive. I have on occasion gotten e-mails from people stating that seller "X" has the same item for less than I do. My response: Then go buy it from that seller! If I have something that I don't know what the current value is, I will search the internet for the same item and see what others are selling it for. I have some older toy items that others are selling for many hundreds of dollars, which I know is way more than I originally paid, so in that case I list at a price which is substantially less.  

Cent Wars: By How Much Do You Lower Prices to Compete?   Cent Wars: By How Much Do You Lower Prices to Compete?

This user has validated their user name. by: Rexford

Tue Sep 11 07:52:20 2012

There is such a thing as perceived value. If a buyer sees an item that he/she feels is under priced, he/she might think that the item is defective in some way.

We sell our items at a price that we think it should be based on the quality and the brand.  We sell quality items for a fair price, but we are not the cheapest.  Sometimes we have to wait longer for a sale  but it is worth it and we don't "give away the store".  We also don't attract those buyers who are sometimes referred to as "bottom feeders".  Those types of buyers are most often the biggest PITA buyers AFTER the sale.

I often shake my head when I see sellers under pricing brand new items that, with a little patience, would bring a much bigger profit.  We often buy from those sellers and re-sell the item for a large profit.

I have to wonder if some sellers are actually challenged with math.  If you take Amazon, eBay and PayPal fees into account, my guess is that some of these sellers are actually losing money.

Cent Wars: By How Much Do You Lower Prices to Compete?   Cent Wars: By How Much Do You Lower Prices to Compete?

This user has validated their user name. by: Al G

Tue Sep 11 09:57:29 2012

When selling on Amazon, or eBay for that matter, I'll set my price based on my cost. If that is the lowest price than that's what it is. If it is a popular/desirable item and cheapest, I'll bump up the price accordingly.

If it's a dog, it will be priced to move.

If I have to take a loss, then I want to get rid of it fast.

Fortunately, more not than often, I don't get a surprise that the book I'm trying to sell on Amazon is half again what I paid for it. It does happen though & at that point, I'll price it near the lowest price given condition etc of the others & take the loss.

I'd rather take my chances on Amazon and eBay than in Las Vegas.

Cent Wars: By How Much Do You Lower Prices to Compete?   Cent Wars: By How Much Do You Lower Prices to Compete?

by: Moonwishes This user has validated their user name.
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Tue Sep 11 23:09:16 2012

I've just started listing on Amazon after a long gap. I used to be surprised and now continue to be at 'sellers' that leave so much money on the table for items that I sell and I have never seen them as low priced as sellers are trying to sell them for. They seem to have no concept of the value of the product and what people will actually pay. I of course, wonder where they got the item in the first place so that they could sell it for so cheap and if I had the funds and needed more inventory, I would think about buying them up but I don't want to encourage penny sellers. I've been having some nice sales and I certainly don't have the cheapest price. Mine are exactly the same as what I would price something for on my other venue, ecrater. I don't care what others are selling for anymore, I put up my price and if doesn' sell, oh well. I don't have the energy to do this to loose money or make at most a quarter.

Cent Wars: By How Much Do You Lower Prices to Compete?   Cent Wars: By How Much Do You Lower Prices to Compete?

by: comet This user has validated their user name.

Tue Sep 11 23:27:37 2012

I have to laugh when I see someone selling something I have priced for say $10 and they have it listed for $30.  Now I am a careful shopper for things I buy to re-sell so I have educated myself on the actual SELLING PRICE of items but these clueless people seem to feel that just because they have a pretty background to their picture or a fancy font they can command much higher prices,  I price my items to sell and make me a decent profit.

I do have one "competitor" who has made it a point to try and "call me out" directly by undercutting his prices against an item of mine.  This is not exactly working as he has not in fact SOLD any of these items and I---have.  And I refuse to lower my price---that has been steady and steadily SELLING for quite some time now--because this guy had a snit fit over my catching him stealing images off of my and others listings and using them to promote HIS items!

As to others just plain old selling the same sort of things---I don't think a penny is going to move me.  As a buyer it is the whole package that determines WHO I buy from and at what price.  And a large part of selling is knowing how a buyer thinks and what matters to them.  

I do lower prices for things that don't move if I think this is the issue.  Of course things like seasonality and fashion also enter into clothing and other items.  But for steady market items I would rather use the space for items I know will sell and park the rest in storage until the time rolls around again for them to go live.

Cent Wars: By How Much Do You Lower Prices to Compete?   Cent Wars: By How Much Do You Lower Prices to Compete?

by: Tiffee Jasso This user has validated their user name.

Wed Sep 12 04:38:09 2012

I generally get more for my books on Ebay and than those who sell the same book on Amazon and for several reasons that have nothing to do with penny cutting. I don't care what someone else is selling their books for, what I care about is am I going to have some profit left by the time I count the cost of the book, Paypal and Ebay fees and my time? I also discuss the book in my description and to date, my book ad on Ebay is at this time, just my book and not just my name in a list of sellers with prices that often are not correct.  



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