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Mon Oct 17 2016 13:14:38

Why Amazon Sellers Shouldn't Set It and Forget It

By: Ina Steiner

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Things change rapidly on Amazon thanks to the highly competitive environment, and a new report suggests sellers should not take a set it and forget it approach to selling there.

XSellco studied a sample of over 300 customers who use its Price Manager tool to automate their pricing on Amazon for a 30-week period. The study found that sellers saw an immediate boost in average weekly sales, but also sustained a new level of business in the long run.

The report found the customers studied experienced a 145% increase in weekly sales over the 30-week period. It estimated the growth amounted to an average increase in revenue of $203,000 for each seller over the course of the period studied.

One of the more interesting findings was that sellers used more sophisticated repricing strategies over time, refining their approach and expanding them to more SKUs over time.

One of the first repricing strategies used by sellers includes Fulfillment method rules. XSellco CEO Victor Corcoran explained that this rule allows sellers to set their product to automatically reprice based on whether the competitor is using Fulfilment by Amazon (FBA) or is self-fulfilled (FBM).

"For example, as Amazon favours FBA sold items, an FBA seller may set their rule to reprice significantly above the competition when the rival is FBM, as they can be more expensive than FBM sellers and still win the Buy Box," he told us. "Conversely typically FBM sellers must undercut FBA sellers in price in order to win the Buy Box."

You can download the full report on the Xsellco.com website, and stay tuned for our interview with Victor in the next issue of EcommerceBytes 411 where he reveals more and addresses where eBay is when it comes to dynamic pricing. 

What do you think of repricing when it comes to your own listings on Amazon and eBay, when it comes to your competitors, and do you think eBay sellers will end up repricing to the same extent as on Amazon?




Comments (6) | Permalink

Readers Comments

Why Amazon Sellers Shouldn't Set It and Forget It   Why Amazon Sellers Shouldn't Set It and Forget It

This user has validated their user name. by: RKTOYS

Tue Oct 18 09:24:31 2016

As long as Amazon is gobbling 20% of every sale and expecting me to ship long distance on $4.49, I'd be a fool to let their automated tools set my prices.

Why Amazon Sellers Shouldn't Set It and Forget It   Why Amazon Sellers Shouldn't Set It and Forget It

by: topdog This user has validated their user name.

Tue Oct 18 23:42:16 2016

It doesn't help us, 90% of our items have a MAP price. The few things that don't, there is usually someone already using a repricer, adding one on our end will just lead to a race to the bottom in a millisecond. We already price those as low as we can and have it make sense, so adding a repricer will not benefit us.  

Why Amazon Sellers Shouldn't Set It and Forget It   Why Amazon Sellers Shouldn't Set It and Forget It

This user has validated their user name. by: VV

Wed Oct 19 09:07:00 2016

Repricer = race to bottom

Why Amazon Sellers Shouldn't Set It and Forget It   Why Amazon Sellers Shouldn't Set It and Forget It

by: IndyTom This user has validated their user name.

Wed Oct 19 10:47:45 2016

When I first started on Amazon, it used to drive me crazy when someone kept under pricing my listings by 2 cents. I used to think, "how petty!".  Well, duh on me.  I won't use a repricer, they annoy me.

Why Amazon Sellers Shouldn't Set It and Forget It   Why Amazon Sellers Shouldn't Set It and Forget It

This user has validated their user name. by: Don Wagner

Wed Oct 19 16:30:46 2016

Maybe it makes sense for some sellers to use a tool like this, but I just can't see it.

Why Amazon Sellers Shouldn't Set It and Forget It   Why Amazon Sellers Shouldn't Set It and Forget It

by: XSellco This user has validated their user name.
Web Site

Mon Nov 14 12:43:40 2016

After taking on board the feedback from sellers, we found that a lot of sellers still think a repricer would erode profits.

So we investigated further and found that in the same period, average order value remained the same, and did not decrease as sales increased by 145%.

Read the results here: https://www.xsellco.com/resources/amazon-repricing-race-to-the-bottom/


If
you have any further questions, just let me know.



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